Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Platter who wrote (36439)	2/1/1999 1:54:00 PM
From: Crimson Ghost	Read Replies (1) of 95453

Wonder if the MS downgrade today represent the last of the Wall Street bulls finally throwing in the towel. Chevron big wigs sure talking like there is a conspiracy to shut down smaller higher-cost producers world wide. KUWAIT (January 30, 1999 11:50 a.m. EST nandotimes.com) - The Chevron Corporation said Saturday that world oil prices could return to $18 in a "few years," predicting a drop in supplies to the market by small producers crushed under the current price slump. Chevron Chairman Ken Derr told Reuters in an interview in Kuwait that the San Francisco-based world oil corporation had forecast a 1999 price for West Texas Intermediate of $13 to $14 a barrel -- slightly above recent levels. "We think prices will return to the $18 level but it could take some period of time before that happens," he said, adding that a balance between supply and demand could return to the over supplied market "in a few years ...." "We are already seeing, (and) another six months of low oil prices you are going to see fairly significant reductions in non-OPEC productions. "We see small producers shutting oilfields in the United States right now, and we will see more of that. They are reducing budgets, not just oil companies but also governments ... Everybody is spending less money," he said. The production cost in most Gulf Arab states is around a $1 a barrel compared with much higher levels - $6 to $8 - in areas like the North Sea and parts of the United States. The oil price drop to 12 year lows triggered a 51 percent decline in Chevron's fourth-quarter net income to $431 million.

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