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To: Gary Burton who wrote (50018)	8/29/1999 11:58:00 AM
From: Gary Burton	Respond to of 95453

fwiw-Jim Cramer said on the TSC's tv pgm on Fox this weekend that 'oil is coming down big time'. He thinks Venezuela will soon start cheating ( I doubt they will)

To: Gary Burton who wrote (50018)	8/29/1999 12:17:00 PM
From: enervestor	Respond to of 95453

I am skeptical of the price bands working also. I don't think anyone has enough information about how much oil is floating around at any one time to really fine-tine the production that well. Also, much of what determines the price of oil is market psychology as much as physical fundamentals. In this respect, I think the world economy will be more important in the near future than OPEC. When oil spiked above $25 two-three years ago, the price was driven by speculators focusing on strong world demand, rather than OPEC. Analysts were daily saying there is no fundamental reason for oil to be above $25, but the speculators kept it there until the Asian debacle killed demand. It was only after the Asian meltdown that OPEC once again hit the headlines. As the world economy recovers, OPEC will lose much of its clout again as we are already seeing the speculators push up oil prices well in advance of fundamental tightness. If the world economy is humming along nicely in another year, the world press will once again forget about OPEC until the next crisis.

To: Gary Burton who wrote (50018)	8/29/1999 1:23:00 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

RE: Pricebands - " it will likely cap the upward momentum of osx and ep stocks" .... but, not the domestic Nat Gas pureplays ! - with the fundamentals so strong for domestic Nat Gas (especially the Eastern Seaboard market - ie: RRC !) why even bother worrying about what OPEC does, or doesn't do - or, the markets reaction to it, or what Big Oil does Cap Ex spendingwise in relation to its view of the sustainability of crude prices here ! Simply - GO GAS ! Personally; I think that if OPEC holds the cuts untill April that we will see a crude shortage and a substantial speculative bubble in crude prices - allthough it will be short lived; perhaps just 1 quarter; as OPEC will ''then'' quickly expand production to protect market share etc... I think the analysts have BOTH over-estimated supply AND under-estimated demand and we ''could'' see a historic situation play out in both Crude & Natural Gas this winter... Quite simply OPEC has cornered themselves into creating a speculative bubble in crude - as they know they can NOT - now raise production; the Market would severely penalize them and they know this ! They have been backed into a corner of maintaining production levels that they also know will create pricing to a level to stimulate Global production - but; what is the lessor of the two evils for them ? Higher prices - prompting competitive production & potentially them losing some market share - ''down the road'' later.... OR, absolutely losing all credibility with the market and see prices fall quickly in trying to stabilize crude prices into a ''banded level'' ? ... this is a no-brainer ! They HAVE to stick with the cuts - and they WILL create a shortage and Crude will reach a speculative bubble level for a short period of time - somewhere in the next 3 quarters.... Bottomline; this will be a huge windfall to the Oil Majors and the Independant E&P companies. I do not think that they will increase Cap Ex spending to the levels that many here think... I think this will however be a historic 3-4 month windfall of revenue for the E&P's who will be able to dramatically repair balance sheets and flow massive amounts of cash to the bottomline. ... for all of those reasons; this ''is'' and will ''remain'' an E&P play.

To: Gary Burton who wrote (50018)	8/29/1999 10:15:00 PM
From: Roebear	Respond to of 95453

Gary, I am showing Crude up .11 at 21.38, NG down .05 at 2.92, perhaps someone has more up to date quotes. My 2c says Monday or in the next few days we will see which of these the market is looking towards: trading price bands, OPEC cheating, Asia demand and the Boom Bulldog 2000 (sorry BB, 0002godlluBmooB) or finally the Sliderian Hypothesis of OPEC IQ. Certainly more fun in any case, than last winter in the oil patch! Roebear

To: Gary Burton who wrote (50018)	8/30/1999 8:40:00 AM
From: diana g	Read Replies (2) \| Respond to of 95453

The Band --Can it work? Is it Good For OSX? Gary, I'm inclined to agree with you, except that I think Stable oil prices are more important than high oil prices, and may be perceived to be so by the market sooner than expected. I'm sure we all agree that it's difficult to criticize the price control mechanism when its details, or even a rough outline of its construction, are not available. Still, I think the general idea is a good one, and it seems to me it would be quite possible to achieve a control of price with such a mechanism. A 'Band' would not be inherently extremely difficult to implement, imho. What it needs to succeed is the same thing the current system needs --- A commitment among producers to work together for the common good. They have shown a new spirit of co-operation these last months, and I believe they recognize that continuing in this co-operation is the best policy for them as individuals. Of course there are potential problems, but imho they probably will be worked out. Those who are saying such a control system is impossible must rely for this conclusion on a lack of co-operation among producers; on the old 'Cheating is Coming Soon' hypothosis. (If anyone has other reasons for their doubts of producer-agreed mechanized supply/price controls, would you please explain them? Thanks!) But the producers have been showing us and themselves for some months that co-operation is not only possible but profitable. I think they will continue to hang together for at least the forseeable future. Not a Sure Thing, but Probable, imho. I also think that a stable $18-20brent price will be very good for the sector as a whole. Spending on e+p etc is bound to be positively influenced by a stable price in such a range--- which is a range where good profits can be made by most sector companies. Even much higher prices would not do as much to encourage e+p spending when the strong possibility existed that the price would collapse before the increased spending could bear fruit. A Stable Price in the $18-20brent range is good for darned near everybody, imho. regards, diana