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

To: Douglas V. Fant who wrote (48152)	7/18/1999 3:18:00 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Credit Suisse First Boston's Flannery sees Asian oil demand growing Asia will likely need 2.6 percent more crude oil this year than last, thanks to stronger-than-expected demand in South Korea, Japan and India and China, according to a Credit Suisse First Boston's analyst. "The recovery in Asia is now much more balanced with much of it coming from Japan and from South Korea," said Mark Flannery, head of Asian oil and gas research at Credit Suisse in Hong Kong. This year, Asia's oil demand will likely average about 19,443 million barrels a day, up 499,000 barrels from 18.944 million barrels a day in 1998, he said. South Korea's oil demand will lead with growth of 8 percent this year to about 1.987 million barrels a day, followed by a 7 percent increase in India to 1.947 million barrels a day. Flannery had previously forecast South Korea's 1999 oil demand growth at 4 percent, and India's at 5 percent. He had also raised his forecast for demand for oil in Japan to grow 0.5 percent instead of a 5-percent decline. China Down China's oil demand, however, will rise about 3.2 percent to 4.22 million barrels a day, from 4.09 million barrels a day in 1998, said Flannery. That's less than the previous forecast of 4 percent because the Chinese economy isn't growing as fast. "China is still in a stage of deflation," he said. "There's less going on in its industries than is readily apparent." While oil producers may look forward to crude oil prices rising to more than $20 a barrel as a result in the increase in demand in Asia, the picture is bleak for refiners due to an increase in supply. Reliance Petroleum Ltd., the oil refining unit of India's largest petrochemical company, will start production at its $3.2 billion refinery, bringing an additional of 540,000 barrels a day of refining capacity. Margins may fall to as low as $1 a barrel at refiners in Singapore, from a previous forecast of $1.60 a barrel, said Flannery. Flannery recommends investors to "buy" Australia's Woodside Petroleum Ltd.; South Korea's Sangyong Oil Refining; and India's Bharat Petroleum Corp. and Hindustan Petroleum Corp.