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

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To: Crimson Ghost who wrote (45848)	6/3/1999 2:18:00 PM
From: BigBull	Read Replies (2) of 95453

Saudi and Iran both are stressing May OPEC compliance of over 90% These OPEC boys are sure bullish on the price of crude. What will compliance of over 90% do to crude stocks around the world. Going Down, Going Green. This was cut from www.gulf-times.com Gulf oil powers play down low prices as speculation DUBAI: Major Gulf oil producers yesterday played down the current weak crude price and expressed optimism that strong adherence to an agreement to curtail production would deliver market recovery. A Gulf source said Saudi Arabia - the world's biggest oil producer and exporter - believes market fundamentals are still solid despite bearish sentiments. "The decline in the oil price is due to speculation. The fundamentals are still sound," the Gulf source familiar with Saudi thinking said. The remarks were made days before Mexican Oil Minister Luis Tellez was to travel to the Gulf to discuss the market with his Saudi and Kuwaiti counterparts. World oil prices fell sharply on Tuesday after Iraq said it would be able to raise crude exports under a new phase of the UN oil-for-food exchange. Benchmark North Sea Brent blend crude oil futures for July delivery fell 65 cents to $14.55 a barrel following the announcement on Monday by the Iraqi oil minister. "Saudi Arabia is confident that prices will improve," said the Gulf source. "Saudi Arabia expects prices to reach $18 to $20 a barrel in weeks." "Saudi Arabia and other producers are determined to do whatever is possible to improve prices," he added. Opec and producers outside the cartel reached a deal in March to remove just over 2mn barrels per day (bpd) from world markets in a bid to prop up prices. Iran's Opec governor, Hossein Kazempour Ardebili, expressed confidence that high compliance with the supply restraint pact would boost prices. He said it was too early to review the output curbs. "It is premature to talk about touching the level of production," he said from Tehran. Kazempour said Iran was satisfied with the level of compliance with the production cut accord and expected better prices. "Iran is satisfied with the level which was above 90%," he said, referring to the month of May. "We are confident that with this level of compliance and with growing demand in the months ahead prices shall improve." Saudi Arabia also shares the view that compliance with the cuts was above 90% in May, the Gulf source said. Kazempour noted several factors limiting the impact of strong compliance with the output curb agreement. He cited higher gasoline stocks, news about Iraq's higher production targets and reduced refinery throughput. Optimism over the fate of the market was also expressed by UAE Oil Minister Obaid bin Saif al-Nasseri. He stressed in remarks published in UAE newspapers yesterday that the market glut would not last long and that a balance between supply and demand would return "soon". Tellez said last month that the March cut agreement may need review before the accord expires next spring, if prices remained high. He and Saudi Oil Minister Ali al-Naimi will review market conditions since the March deal, the Gulf source said. Tellez is then due to travel to Kuwait for similar talks on Sunday. - Reuters --------------------------------------------------------------------------------

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