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

To: Tomas who wrote (49894)	8/26/1999 9:28:00 AM
From: Wowzer	Read Replies (1) \| Respond to of 95453

WSJ oil summary: August 26, 1999 Crude-Oil Futures Plunge After Disappointing Data By PETER A. MCKAY Staff Reporter of THE WALL STREET JOURNAL Data showing ample U.S. petroleum stocks pushed crude-oil prices lower for a second straight session on the New York Mercantile Exchange and gasoline for a fourth straight session. In recent days, energy prices have fallen because of several bits of incremental news, including the coming end of the summer-driving season, sparse hurricane damage to Southwestern drilling facilities, and Germany's plan to sell 34 million barrels of its crude reserves. Bearish statistical reports from the American Petroleum Institute trade group and the U.S. Department of Energy sparked another sell-off Wednesday. In its weekly briefing released after Tuesday's close, API reported only modest declines of energy stocks, including 197,000 fewer barrels of gasoline. The DOE reported similarly bearish numbers, including a decline of 4.6 million barrels of crude oil to 317.2 million nationwide. Because traders had been hoping for steeper cuts, front-month October crude-oil futures fell 89 cents to $20.58 a barrel on Nymex. Gasoline fell 2.21 cents to 63.01 cents a gallon. "The market was probably looking for a little bit of a correction, and this was as good an excuse as any," said energy analyst John Saucer of Salomon Smith Barney. "I wouldn't say that the market is going to fall out of bed now, but we could be entering a corrective phase in the short term here." Several other market watchers agreed that the bearish statistics only ignited a decline that was fueled by smaller factors as well. Besides Germany's announcement, the United Nations said this week that Iraq had raised its crude exports 360,000 barrels a day in the week ended last Friday. Oil prices have been on a particularly sharp uptrend since the fall, moving from around $16 a barrel to near $22 in recent weeks. However, the market hasn't been able to sustain itself above that benchmark and had become severely overbought as investors flocked to the higher prices. Large commodity funds have been especially likely to snatch up long positions, or bets that prices will rise, analysts said. "This market is very overextended, and we're in a tough time of the year right now," said analyst Scott Meyers of Pioneer Futures. "We're at the end of the driving season but not quite into heating-oil season." The prospect of increased production from the Organization of Petroleum Exporting Countries also hurt prices Wednesday, because prices may have risen high enough to be an incentive for increased output, said Paribas analyst Tom Bentz. Oil ministers from OPEC's Saudi Arabia and Venezuela and non-OPEC Mexico meet in Caracas, Venezuela, Saturday to discuss maintaining a price band for crude-oil prices. Some in the market speculate that maintaining the upper end of a band would open the door to some form of production increase. Other analysts, while acknowledging that fundamentals kicked off the selling, said technical factors were the prime force moving prices Wednesday. "It doesn't surprise me that you see a lot of the funds bailing," Mr. Bentz said. "The first hint was [Tuesday's] close under $21.50," significantly below what Mr. Bentz described as the "psychological" barrier of $22 a barrel of crude oil.