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: SargeK who wrote (37716)	2/18/1999 11:44:00 AM
From: Think4Yourself	Read Replies (1) of 95453

SargeK, your statement confused me. Can you please explain your logic? "Recent actions by the U.S. to add to the SPR and lease space to the producers add tangible evidence that we are on board to reduce marketable inventories and stabilize prices at a loftier levels." My take is that this will worsen the situation because we have postponed the inevitable price dive until after the March meeting. When there is no more storage for products, that restricts the amount of oil that can be bought (i.e. less demand) and decreases the price. The ONLY thing that will make the bickering OPEC nations cooperate is the hit in their pocketbooks. They WERE going to take that hit in the next month, but now "relief" (which actually means shooting themselves in the foot) is only a few months away. In other words, they have LESS incentive to cooperate in the March meeting. Also, that oil space leased in the SPR is not PART of the SPR. It is therefore supply (subject to potential access window restrictions), just as if it were in the refiners tanks. Is my logic flawed? If so how? Thanks! Ken

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