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Gold/Mining/Energy : American International Petroleum Corp
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To: DRRISK who wrote (9547)3/4/1999 7:35:00 PM
From: bobgh  Read Replies (1) of 11888
 
---A DIFFERENT VIEW---

Merrill Lynch analysts

March 3, 1999

AMSTERDAM, AFX via NewsEdge Corporation : The oil
sector is poised for a " very robust" recovery and
shares in major oil companies will prove to be "very
rewarding investments" for patient investors, Merrill
Lynch analysts Constantine Fliakos and Christopher
Malone said in a report.

"A recovery in oil demand could coincide with faltering
supplies from non-OPEC sources, and the
supply/demand balance could tighten as a result, "
they said.

While low oil prices have severely impacted oil
company profits and spending plans, "inventory and
oil price extremes tend to be followed by extremes in
the opposite direction," they said.

"In the very near term, the only hope for a recovery in
oil prices and in the oil stocks would be any
agreement by OPEC to once again lower production "
they said, adding that while there is no evidence this
will happen imminently they expect in the long term
"reason will prevail and OPEC will act to curtail
production."

The analysts also warned that the current mood of
complacency about low oil prices is unjustified and
"dangerous".

"Unless the current trend is reversed soon, we may be
heading inexorably toward another energy crisis
sometime in the next five years" once the global
economy and oil demand recover.

They said non-OPEC supply sources will only be able
to satisfy a "small portion" of the projected growth in
demand given that "not enough money is being spent
to maintain, let alone to increase, capacities."
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