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: ChanceIs who wrote (47080)	6/30/1999 9:21:00 AM
From: pz	Respond to of 95453

Wednesday June 30 8:47 AM ET Oil Analysts Lift Price Forecasts LONDON (Reuters) - Oil analysts have raised their price forecasts on the back of a bullish supply picture created by strict producer compliance with output cut pledges, a Reuters survey found. The poll of analysts and consultants forecasts an average price for the third quarter of $16.25 a barrel, a marked improvement from $14.30 predicted in a survey in late April. Fourth quarter average forecasts now stand a dollar higher at $16.24 and average predictions for 2000 are at $15.97, up 50 cents from April forecasts. The brighter outlook is the result of stern adherence by the Organization of the Petroleum Exporting Countries and a handful of other producers with a March agreement on output cuts. ''We believe the market will be bolstered by strong fundamentals which should bear themselves out as we progress through the year,'' Salomon Smith Barney's Paul Ting said in a research report. ''OPEC's rate of compliance with production cuts remains remarkably high,'' said Ting. ''Within OPEC there appears to be a newfound spirit of cooperation.'' Other constructive factors included signs of revival in Asian oil demand, faster output decline rates in some older non-OPEC fields and tight curbs on spending by big oil companies. In addition some analysts doubted Iraq, not bound by output cuts, can increase its capacity by volumes planned. Analysts expected petroleum inventories to fall in the second half of the year as the impact of OPEC cuts is felt. Many analysts said the price rise could be steep enough in the third quarter of the year to prompt producers to consider relaxing cuts to stop overheating the market. Some OPEC members have said the rapidity of the price rally may require a decision on the timing of any output adjustments at the next meeting of the group in September. Whether by cheating or design -- or a messy mixture of both -- OPEC may have to raise output to prevent killing off a demand revival in convalescent Asia and to discourage rivals to bring on more production. ''I believe that there will be a semi-organized bout of ill-discipline (in OPEC production) which will keep the average price where I'm expecting it,'' said David Stedman of Daiwa Institute of Research. ''If they are sensible they will keep one eye on those Asian consumers that are still showing fragility and not blast them out of the water with $21 a barrel oil.'' Brent has risen by more than a third to around $17.00 since the latest round of output cuts was agreed in mid-March, having started its ascent even before any large draw in stocks. And most analysts say Brent will rocket above $18 at some point in the third quarter. But in terms of export revenues, many producers may feel the rally should be allowed to develop for some time to come without hindrance in order to heal damaged state coffers. They will argue that despite the rally this year that halted the devastating price slump in late 1997 and 1998, it can only lift revenues in any meaningful way by enduring for many months. Brent crude averaged a mere $13.64 in the first half of this year at a time when prices were rising, well under its average $14.34 in the same period last year when prices on their way down.

To: ChanceIs who wrote (47080)	6/30/1999 9:23:00 AM
From: pz	Read Replies (1) \| Respond to of 95453

Wednesday June 30, 7:15 am Eastern Time Note: this article has a followup with more information. FOCUS-Oil targets 18-month highs on U.S. stockdraw LONDON, June 30 (Reuters) - Oil prices edged higher again on Wednesday after another unexpected drop in U.S. crude oil stocks and signs of growing demand for gasoline set the market's sights on new 18-month highs. London August Brent Blend futures jumped 21 cents to $17 a barrel after the American Petroleum Institute (API) reported a near 500,000 barrel drop in U.S. crude stocks in the week to June 25. This was against expectations for a rise of some two million barrels and follows a big and unexpected fall the previous week. August Brent was now closing in on the $17.20 high seen two weeks ago, which was the highest since December 1997. ''While the API report does not seem to have enough in to push crude out of its recent range...the upward resistance at $17.20 is now tantalisingly close,'' said Lawrence Eagles at GNI Research in his daily report. While Brent could break through the $17.20 level and attract fresh buying from institutional funds, Eagles was sceptical that there was enough short-term strength to sustain a big push up. The market was waiting for confirmation of the API data from the U.S. Energy Department's Energy Information Administration's weekly inventory report due to be released later on Wednesday. The API report also showed a draw of more than one million barrels in U.S. gasoline stocks which, while less than expected, showed demand cutting into the recent supply glut. An improving U.S. gasoline demand picture follows Tuesday's news that Mobil had shut catalytic cracking operations at its Beaumont, Texas, plant for a week. The market is sensitive to news of U.S. refinery disruptions which effect gasoline supplies during the peak summer motoring season in the United States, which consumes 40 percent of the world's gasoline supplies. Oil also derived continued support from growing crude demand as European refiners restored some operations cut last month. Europe's biggest refiner, Royal Dutch/Shell, said on Tuesday it had eased restrictions which cut crude throughput across the continent by 20 percent for most of May and June. Shell was to decide soon on its refinery operations policy for July. Shell's move follows a decision by BP Amoco/Mobil's European refinery joint venture to restore maximum throughput after cuts over a number of weeks in response to poor refining profits. Brent crude has climbed more than $7 a barrel since briefly slipping below the $10 mark in the middle of February, with the latest OPEC output cuts, in place since April, starting to erode the surplus stockpiles that had weighed on the oil market. (Note: this article is ''in progress''; there will likely be an update soon.)