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

To: Gary Burton who wrote (55720)	12/1/1999 5:48:00 AM
From: oilbabe	Read Replies (1) \| Respond to of 95453

Crude Oil Seen Higher as U.S. Supplies Drop More Than Expected London, Dec. 1 (Bloomberg) -- Crude oil is expected to rise after U.S. inventories fell more than expected, the latest sign that supplies in the world's top energy-consuming nation are declining as leading oil-exporting nations reduce output. Crude oil for January settlement is expected to open 50 cents to 60 cents higher from $23.64 a barrel on the International Petroleum Exchange, traders said. Crude oil for January delivery on the New York Mercantile Exchange was up 56 cents at $25.15 a barrel in electronic trading. U.S. crude oil inventories last week dropped by 1.2 percent, more than analysts expected, to near their lowest level in two years, the American Petroleum Institute said. The figures overrode traders' expectations that Iraq, which pumps 3 percent of the world's oil, will resume exporting oil within days, speculation that caused oil to drop almost 5 percent yesterday. The API report ``is giving the market a boost, but we're also seeing a reaction to yesterday's sharp drop,' said Lawrence Eagles, an analyst at brokerage GNI Ltd. Even after yesterday's 4.9 percent drop -- its biggest decline for two months -- oil prices are close to a nine-year high, having more than doubled from December after the Organization of Petroleum Exporting Countries and four other nations cut output by some 7 percent for a year starting April 1. The latest evidence of that supply restraint came after the close of floor trading on Nymex yesterday, when the API reported a third straight weekly decline in oil inventories. Crude supplies dropped 3.6 million barrels, exceeding estimates from all 10 analysts in a Bloomberg survey. U.S. inventories now stand at 303.3 million barrels, just 1 percent above last month's low of 300.3 million barrels. Iraq A dispute between Iraq and the United Nations last week sparked a rally in prices to their highest level since the 1991 Gulf War as traders bought oil in case the impasse lasted through the peak winter demand period. Still, in the last few days traders have speculated that the UN could soon resolve a deadlock over its Iraq policy, allowing OPEC's third-biggest producer to expand exports after nine years of sanctions. Iraqi Deputy Prime Minister Tariq Aziz is in Moscow today to discuss a six-month renewal of its UN-controlled oil-for-food program and the eventual lifting of sanctions. The visit could mean that a compromise could be in the works to reconcile U.S. insistence on weapons inspections with Iraq's demand that sanctions be ended immediately. Iraq's oil minister, Amer Mohammed Rasheed, said Monday that Baghdad's suspension of exports would last two weeks, or until Dec. 4. He didn't say what the country will do after that.