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Technology Stocks : 2000: Y2K Civilized Discussion -- Ignore unavailable to you. Want to Upgrade?

To: foobert who wrote (55)	8/9/1999 2:02:00 AM
From: C.K. Houston	Read Replies (1) \| Respond to of 662

WORLD BANK: Effect of Y2K on oil trade feared August 9, 1999 FEARS about the millennium bug could destabilise global commodity markets in coming months, disrupting shipments of grains and leading to supply-demand gaps and price hikes for crude oil. The warning comes in the latest World Bank Global Commodities Report, released on Friday in Washington. "Concerns over the potential disruptions associated with Y2K may cause consumers, processors and distributors to stockpile crude oil and products," the World Bank says. It adds that this could lead to price pressures as key northern hemisphere economies enter the winter season of peak demand for energy. But with the Y2K deadline now less than five months away, even rapidly managed stockpiling measures intended to avoid any last-minute hitches could run into trouble. "A shortage of ocean tankers may develop if importers rush to beat the end-of-the-year concerns over Y2K and this could contribute to the potential for price volatility," according to the bank. Its commodities update is generally mildly bullish about the near future, saying many prices are strengthening as stockpiles are run down and much of the world economy begins to pick up pace. However, further falls are forecast in agricultural product prices, with stockpiles of rural goods still high and with supply likely to be boosted following another large harvest. While some crisis-stricken economies are on the mend ? including those of Brazil, Russia and, to an unexpected extent, parts of Asia ? the World Bank notes that risks remain to the global outlook. Japan's recovery "is very uncertain", Europe's "is still very hesitant" and a stock market correction in North America and Europe "is possible". But overshadowing those concerns is a fear of the unknown: the possible impact of the millennium bug. Consumers might attempt to store in advance of the start of the year 2000 such basic staples as food and fuel. If they do, that could trigger price hikes. On the other hand, producers could attempt to pre-empt their worries by rushing greater supplies on to the market, thereby easing price pressures. Either way, the bank says, energy appears to be the commodity most vulnerable to the bug. For one thing, peak demand is in the winter, and the forecast rise in demand will come just as OPEC's production cuts take effect. For another thing, the bank notes that "oil production is the most technology-intensive of major commodities". "Embedded microchips used for production, transportation, refining and distribution leave energy vulnerable to disruption." A further spinoff of Y2K fears could be disruptions to shipping which force traders to place a high priority on getting high-value goods to market, even if that means pushing low-value commodities off the boats. Grains and tropical timbers could be left on the wharves, while manufactured products took priority, the World Bank report suggests. theaustralian.com.au Cheryl 144 Days until 2000