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 : Games Trader -- Ignore unavailable to you. Want to Upgrade?

To: hsg who wrote (1004)	7/14/1999 8:05:00 PM
From: goldsnow	Respond to of 1239

Cartel cuts double crude prices By Ian Howarth, Resources Editor Forget the false dawns about a recovery in several stricken metal prices. The action is in oil. Crude oil prices have doubled in price in the past six months following OPEC cuts in production, thus renewing interest in oil stocks. A steady decline in US crude oil inventories in the past month has also kindled confidence that the long-promised OPEC crude oil production cuts may be more permanent than initially expected. The international benchmark crude, West Texas Intermediate, fell to just above $US10 a barrel last November, but yesterday rallied to $US20.15 a barrel. And crude oil prices could move higher, according to broker Merrill Lynch. A report by Merrill's senior oil analyst in New York, Mr Michael Rothman, said OPEC could, "over-tighten supply, raising the spectre of $US20-plus oil". Mr Rothman said the forecast took into account, "recent indications of better than expected world economic activity," particularly in Asia, which suggested there could be a sharp "tightening of the oil balance in the latter part of 99". The future of crude oil prices depends on whether OPEC can maintain internal discipline to stick to production quotas, a feat which eluded virtually every OPEC production target in the past two decades. Oil production cuts are often followed by slow increases in output by the less disciplined OPEC members, gradually forcing down prices again. In recent talks, OPEC members agreed to a third round of production cuts which would reduce OPEC output by 4.3 million barrels a day to a rate of 22.9 million barrels. That ceiling has nearly been met with production in May averaging 23.27 million barrels a day, excluding 2.6 million barrels produced by Iraq as part of its oil-for-aid package following the Gulf War. OPEC appears to be resisting internal pressure for production increases despite the rise in world crude prices. Venezuelan Oil Minister Mr Ali Rodriguez, said any decision to lift production rates would have to be unanimous to avoid fracturing the volatile unity within the oil cartel. Statistics from the American Petroleum Institute have confirmed the impact of the recent OPEC production cuts, revealing that US crude oil inventories fell 2.9 million barrels last week, well ahead of expectations. afr.com.au