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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Gary Burton who wrote (46517)	6/16/1999 11:17:00 AM
From: Captain James T. Kirk	Read Replies (1) \| Respond to of 95453

New York--Jun 16--NYMEX energy futures are seen higher following weekly inventory data showing a drop in US gasoline stockpiles last week, which overshadowed the unexpected surge in crude stockpiles. Jly crude jumped 18 cents in overnight trade and could rally to test $19.05, a 17-month high. However, several brokers and traders predict that a move towards this level could spark a sell-off. * * * NYMEX Jly crude ended the overnight Access session up 18c at $18.73. Jly heating oil ended up 51 points at 46.60c, while Jly gasoline ended up 60 points at 54.35c. American Petroleum Institute data reported a 2.251-million-barrel decline in inventories of gasoline last week, while the US Department of Energy reported a 4.9-million-barrel increase. Gasoline demand, as implied by API data, improved to 8.61 million bpd from a revised 7.83 million bpd the previous week. "People are watching the gasoline numbers. It really drives the market here," a broker said. "If the season improves, it strengthens crude and margins will get better." However, crude stockpiles jumped a whopping 4.365 million barrels last week, according to API data, while the DOE reported a 1.8 million barrel rise, which several br okers said should drag the market down. "This market should be lower based on the (data). This is crazy," one trader said. "I really don't understand why it is so high." Jly crude is expected to rise to test resistance at $18.85 fueled by early bidding by participants with short positions, a broker said. "This is the sale of the century. The shorts are scared to death," he said adding that, "this (market) is going to open with a mad scramble of buying." However, if the market is pushed above $19.00, several brokers and traders predict liquidation, which could push Jly crude to test support at $18.55, Tuesday's settlement price. If the contract dips below that, brokers and traders predict that could trigger stop-loss orders to sell, which could push crude down to $18.40. Also, stockpiles of distillates increased 796,000 barrels, according to API data, while the DOE reported a 2.3 million-barrel rise, which most brokers and traders said would not impact the market. Meanwhile, the UK Foreign Office this morning played down wire reports that the UK had proposed sanctions against Iraq be suspended if Baghdad answers remaining questions about its process of disarmament. A spokesman for the Foreign Office said there had been no change in the UK's position regarding Iraqi sanctions, which is that when Iraq complies with UN Security Council resolutions on disarmament sanctions will be lifted. And Shell reported today that Nigeria oil workers have launched a strike over pay. But Shell said that the strike has so far not affected oil output. UPCOMING: --Jly crude options expire Thursday. Jly crude futures expire Jun 22. --Jly product options expire June 25. Jly product futures expire Jun 30.