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

To: Roebear who wrote (50500)	9/7/1999 6:24:00 AM
From: oilbabe	Read Replies (1) \| Respond to of 95453

OPEC Says `Happy' With Current Crude Prices, Will Maintain Output Cuts OPEC Says Satisfied With Oil Price, Will Keep Cuts (Update3) (Adds more comment from analysts) Bali, Indonesia, Sept. 7 (Bloomberg) -- The Organization of Petroleum Exporting Countries, or OPEC, said it plans to maintain an oil output cut till March next year as it's satisfied with present price levels caused by the fall in production. OPEC, which produces a third of the world's crude oil, or between 25 million to 28 million barrels a day, agreed to cut supply by 2.1 million barrels a day in March to end a global oil glut, worsened by a demand slump across recession-hit Asia. Crude ``prices at $20 is reasonable and fair both to producers and consumers,' and will not create inflation in consuming countries,' said Rilwanu Lukman, secretary general of OPEC. Lukman is in Bali for the IIOGE '99 oil conference. OPEC's production cuts pushed up Brent crude oil prices 82 percent since the end of February. Brent for October delivery rose 1.6 percent yesterday to $21.36 a barrel on the International Petroleum Exchange in London. The rebound in prices gives OPEC little incentive to raise production soon, analysts said. ``One of OPEC's biggest problems was enforcing the cuts and it's now in (OPEC's) interest not to ease the compliance so soon when oil prices have made such a remarkable recovery,' said Alexandra B. Conroy, senior investment analyst at ING Baring Securities Shanghai. A global oil glut last year dragged prices to a 12-year low in December, squeezing earnings at oil producers. Not Over Yet That supply glut is not over yet, even as several Asian economies recover from recession. Demand for oil is still not growing fast enough to absorb more supply. Even if oil prices remain at today's levels, there is no guarantee a few OPEC members as well as non-OPEC members will not take advantage of rising prices by raising production. said Mark Flannery, an oil analyst at Credit Suisse First Boston in Hong Kong. ``We can expect to see some leakage in the compliance before next March if prices continue to rise,' he said. ``Many producers are eager to make up for lost revenue during the months when prices dropped to catastrophically low levels.' Refiners would welcome a decline in oil prices as that would lower their production costs, particularly in net oil importing countries such as Taiwan, South Korea and Thailand, said Rupa Bose, analyst at Paribas Capital Markets in Singapore. ``As oil becomes more expensive, the recovery in some countries will become more difficult,' she said. Crude oil prices have risen high enough for many refiners and we do not wish to see any further increase in our costs, said an official at China Petrochemical Development Corp., a Taiwan petrochemical company.