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To: John Paquet who wrote (640)	6/15/1999 4:05:00 PM
From: Ruby	Read Replies (2) \| Respond to of 1239

You are right, but with low volume, they are much better at keeping price up today.

To: John Paquet who wrote (640)	6/15/1999 5:07:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 1239

Rising oil prices unlikely to hamper Asia recovery 05:22 a.m. Jun 15, 1999 Eastern By Raj Rajendran SINGAPORE, June 15 (Reuters) - Buoyant oil prices, likely to breach a two-year high before year end, are unlikely to stifle Asia's rapid economic recovery, analysts said on Tuesday. Crisis-hit countries such as oil producers Indonesia and Malaysia were in for a large windfall, but others facing a bigger import bill could find their recoveries dampened. ''Clearly there will be concern over the rising costs of energy and this is a factor which will hold back possibly even stronger growth, but I do not think the oil prices, so long as it does not shoot above $18 to $20 per barrel, will seriously impede the process of recovery in the region,'' John Russel, Managing Director of Petroleum Economics Ltd told Reuters. Bob Anderson, Senior Principal at consultant Purvin & Gertz said that Asia, having gone through crude oil prices over $25 per barrel three years ago, would be able to cope with the hike. Benchmark Brent crude on Monday closed at $16.69 per barrel in London, about 75 percent more than the 12-year low of $9.55 per barrel seen in December 1998. Bangkok-based Russell said Thailand ''is the one which might find it a little bit more difficult to get the process of recovery up and running'' as a result of the price increase. Thailand imports most of its more than 860,000 barrel-per-day (bpd) oil and gas needs, and high prices were hurting its finances and adding to inflation concerns. Last year, Thailand's crude oil imports alone amounted to 136.45 billion baht, down 18.5 percent from a year ago. South Korea, the other country in Asia where energy imports were a big ticket item, was seen better able to cope with the rising prices due to stronger economic fundamentals. The country's gross domestic product (GDP), which grew by an impressive 4.6 percent in the first quarter, would be cut by 0.16 percent this year if oil prices maintained their current upward trend, the central Bank of Korea said in April. Working on the basis of benchmark Brent crude at $17-19 per barrel by end-1999, a level which oil analysts felt was most likely to be achieved, the central bank said current account surplus would fall by $1.5 billion while the consumer price index would increase by 0.47 percent. Analysts said higher oil prices were here to stay because of a fundamental change in the Organisation of Petroleum Exporting Countries (OPEC) leading to strict compliance of agreed production cuts and better demand in Asia. ''We are very strongly of the view that a serious reform has taken place within OPEC which will have a lasting impact or at least over the foreseeable future...so we anticipate a very high degree of implementation (of production cuts),'' Russell said. OPEC and non-OPEC states in March agreed to a third round of production cuts which sparked the current price rally. Global oil demand was forecast to grow by about one million bpd this year compared to flat growth last year, with about half of that coming from Asia. ''So far a continued surplus in the physical market has acted as a brake on this spectacular recovery...but the physicals will progressively support these numbers through the second half of this year,'' he said. Oil producers in the region such as Indonesia and Malaysia were enjoying a significant increase in revenues as budgets were set when prices were much lower. Indonesia would see revenues increase by 50 percent or about 10 trillion rupiah if prices stayed at current levels, Martiono Hadianto, President of state-oil firm Pertamina said two weeks ago. ((Singapore Newsroom (65) 870-3080; Fax (65) 776-8112, singapore.newsroom+reuters.com)) Copyright 1999 Reuters Limited. All rights reserved.