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

To: oilbabe who wrote (53315)	10/20/1999 4:14:00 PM
From: oilbabe	Respond to of 95453

Prudential's Keenan on Global Oil Inventories: Comment London, Oct. 20 (Bloomberg) -- Following are comments by Mark Keenan, a broker with Prudential Bache (Futures) Ltd., on the impact of oil production cuts by the Organization of Petroleum Exporting Countries on global inventories. The northern hemisphere winter is expected to boost global oil demand by 2.6 million barrels a day over demand in the third quarter, the largest increase in six years, the Washington-based Petroleum Finance Company reported. The American Petroleum Institute reported earlier this month that U.S. oil inventories fell 7.14 million barrels to 298.94 million barrels, the lowest level since September 1997. ``OPEC's cutbacks could cause the largest oil stock draw- down in history over the next four months as winter kicks-in. We expect U.S. stocks to be reduced to 278 million barrels by the end of the year, when we could see the most unbelievable rally in oil prices. ``Price could range between $24 and $27 a barrel by the end of the fourth quarter. ``According to the current level of cuts we should be eating into stocks at about 1.7 million barrels a day. Even if compliance drops we will still get a significant draw on inventories. ``The one thing all these projections depend on is the accuracy of the statistics being reported by agencies such as the American Petroleum Institute and the International Energy Agency,' he said.

To: oilbabe who wrote (53315)	10/20/1999 4:22:00 PM
From: Crimson Ghost	Respond to of 95453

Saudi oil min wants further evidence of demand pick-up Naimi made it clear that producers were vary wary of using volatile oil prices as a gauge for setting policy, especially any decision to increase production, preferring instead to look at inventories and other factors. "One of the problems, of course, with price is there is a lot of hype in the price today...Today, I can tell you that I am convinced, as also other ministers, that what is driving price is not real growth. ``I think there are at least $2-to-$4 (per barrel) in the price that are psychologically-driven rather than demand-driven,' Naimi went on. ``What happened recently were the prices heated to over $24, we could see through that. That was not really driven by genuine demand. That was really more or less speculuation-driven and therefore we did not react.' On inventories, Naimi said ``the '96/'97 inventory levels would be the right place.' In 1996 and 1997, U.S. crude oil stocks, the most reliable gauge of world inventories, averaged about 307 million barrels, dropping as low as 286 million barrels at the turn of the year. Stocks peaked in the middle of 1998 at more than 350 million barrels but averaged about 334 million barrels through February of this year. After the breakthrough spring producers agreement, initiated by non-OPEC Mexico together with OPEC heavyweights Saudi Arabia and Venezuela, stocks have plunged in the U.S. to just above 300 million barrels last week. (Andrew Kelly, Houston Bureau +1 713 210 8508 office; +1 713 751-0093 fax))