Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Tomas who wrote (46557)	6/17/1999 12:01:00 AM
From: Tomas	Respond to of 95453

Volatility the main theme for crude oil prices - Financial Times World Energy, June issue With demand and supply little changed, market perceptions are shaping prices, writes Robert Corzine Crude oil price trends over the last quarter reflect the waxing and waning of the euphoria that greeted the third oil production cut organised in March by the Organisation of Petroleum Exporting Countries and several leading non-Opec producers. Although the formal agreement to cut output did not take place until late March, the markets had factored in an agreement from as early as February. By early March the steady progression in crude prices was well established. That trend continued through to April, as big Opec producers such as Saudi Arabia, Kuwait and the United Arab Emirates vigorously enforced the latest round of cuts. The positive trend was underpinned by a high level of support from Opec countries that had previously had a patchy record of compliance, such as Venezuela and Iran. The rally pushed the two month forward Brent futures contract to the high of $16.78 a barrel on May 5. But at that point the speculative buying that had underpinned the rally began to recede. Some oil companies also began to cut refinery runs as refining margins collapsed. In addition there was mixed data on how quickly surplus crude and refined product stock were falling in key markets such as the US. By the beginning of the June the two month Brent futures price was down to $14.73 a barrel, although that was still well above its level three months before, when it stood at $11.25 a barrel. The behaviour of prices over the quarter highlighted just how volatile prices could be given the wide range of factors that affect them. It also underlines the importance of perception in the market, given that the fundamentals of supply and demand did not change that dramatically over the period.