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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (41467)	7/7/1999 4:48:00 AM
From: donald sew	Read Replies (1) \| Respond to of 94695

Bill, Although, I am still more bullish for the short/mid-term(30 days), the matter of CRUDE rising may help your case for a big pullback. For now it appears it is being ignored, but from the charts CRUDE is still in a firm uptrend. Keeping it basic and simple, the charts on CRUDE show HIGHER HIGHS and HIGHER LOWs. The following article also implies that there could be futher upside, but then Im not a fundamentalist and will leave that to others: >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Fox Market Wire Forums: Analysts SEE OIL GLUT OVER BY END OF SEPTEMBER ---------------------------------------------- 1.53 p.m. ET (1753 GMT) July 6, 1999 By Richard Mably LONDON — OPEC oil exporters are on course to wipe out surplus inventories of crude oil and petroleum products by the end of September, even before the start of peak winter demand, industry analysts said on Tuesday. Cartel shock treatment, in the form of supply cuts administered since April, has already prevented the normal seasonal second quarter stockbuild, they said. "By avoiding a significant second quarter build this year, OPEC has done a great deal to meet its objective of eliminating excess inventories on world markets," said Washington consultancy Petroleum Finance. "If the third quarter draw is as large as expected, the inventory surplus will be eliminated before demand peaks in the fourth quarter." "By the end of the third quarter inventories will be at the bottom end of the five year average in terms of forward stock cover," said a London-based oil analyst. Faster than expected growth in demand from the United States and Asia also has helped accelerate projections for an end to the glut which last year took oil to a 22-year low. "The latest indicators point towards continued oil demand recovery in the Asia-Pacific region," said Kleinwort Benson. Demand in Japan in April jumped 6.8 percent on the year, while consumption in South Korea from January to May rose 8.8 percent. Underestimates from the United States government for demand data have meant a series of upward revisions in recent weeks. "With the U.S. economy still exhibiting brisk demand growth, oil demand must follow suit, leading us to increase demand growth for the third and fourth quarters as well," said Petroleum Finance. "The inventory overhang could be whittled away in a much shorter period of time than thought possible previously," said Dresdner Kleinwort Benson. If the forecasts prove correct they are likely to mean renewed pressure within OPEC to consider easing supply restrictions to avoid the risk of allowing the market to overheat. OPEC has set itself an $18-$20 a barrel target range for Brent crude which on Monday broke above $18 for the first time since December 1997. The cartel has set output limits until end-March 2000 but has a scheduled meeting in late September. Only substantial OPEC leakage can spoil the party. "From now on the real test for OPEC is how long they can keep up their strong discipline," said Mike Barry at Energy Market Consultants in London. "Under past agreements they've never managed to go more than three months." Analysts are using the inventory levels of 1997 as a benchmark for measuring the return to normal stocks, rather than those of 1998, already at bloated levels. International Energy Agency data shows year-on-year commercial stocks held in OECD countries increased every month from January 1997 until March 1999. April saw the first decrease in the year-on-year OECD surplus which peaked at 194 million barrels in May 1998. Absolute OECD stock levels that month rose above 2.7 billion barrels and stayed there until February this year. Petroleum Finance said it was forecasting a global stockdraw during the third quarter of 800,000 bpd, followed by an enormous 2.3 million fourth quarter draw. During the second half of last year stocks were almost unchanged. Second quarter stocks this year were built by just 300,000 bpd compared to 2.9 million in 1998, the consultancy estimated. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< SEEYA