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

To: Ken Robbins who wrote (47386)	7/6/1999 8:31:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

OIL: "The surge has been so strong, it's very difficult to see anything that is going to throw it off course at the moment" Financial Times, July 6 Crude reaches an 18-month high as Opec cuts start to take effect. By Paul Solman Oil prices soared to an 18-month high of more than $18 a barrel yesterday, with petroleum company stocks also benefitting from market optimism. August Brent blend, the benchmark crude futures contract traded on London's International Petroleum Exchange, was $18.19 per barrel in late trading - 53 cents higher than last week's close. The perception that leading oil producers are restraining production to limit supply is the main factor driving up prices. "The surge has been so strong, it's very difficult to see anything that is going to throw it off course at the moment," one analyst said. Shares in BP Amoco, the biggest capitalised UK stock, rose almost 4 per cent yesterday, while Shell was up 2.5 per cent. British Borneo, Lasmo and Enterprise Oil were also sharply higher, helped by French oil group TotalFina's bid for rival Elf. US markets were closed for the Independence Day holiday, but crude futures in New York have chalked up impressive gains recently. The New York Mercantile Exchange's August light crude contract closed on Friday at $19.69 a barrel, its highest since November 1997. Brent crude has jumped $2 in the past two weeks, and added $7 since the beginning of the year. As recently as December, it slumped to a 12-year low of $9.86, on the back of the Asian crisis, fears about the global supply glut and producers' apparent unwillingness to cut output. In March the Organisation of Petroleum Exporting Countries (Opec) agreed to shave about 2.3m barrels off daily output. The price immediately rose but it is only now that it is clear that most of the cuts have been implemented. A report from the American Petroleum Institute showed that US crude stocks had fallen by 488,000 barrels in the week ending June 25, on top of a similar fall the previous week. "Opec's action is at last having an impact on inventory levels," another analyst said. "Sentiment has turned much more positive, and oil prices are likely to keep going until Opec decide they have gone high enough." The rises contrast last year's prices, when Brent averaged $12.76 per barrel and only $11.30 in the first quarter. Analysts have been surprised by the speed of the market's recovery this year, though they caution that there is still some way to go for Brent to equal its 1997 average of $19 a barrel. Many are still forecasting an average of about $17 for the second half of this year.