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

To: Broken_Clock who wrote (55741)	12/1/1999 11:28:00 AM
From: monu	Read Replies (2) \| Respond to of 95453

A little more fuel to the fire? Wednesday December 1 9:53 AM ET Oil Staggers As OPEC Studies Options By William Maclean LONDON (Reuters) - Jittery oil markets dumped early gains Wednesday amid signals OPEC powers might raise output, possibly before March, if supply shortages keep prices sizzling. Benchmark Brent for January was 13 cents adrift at $23.51 a barrel at 9:43 a.m. EST after sliding from an opening of $24.25. Sentiment crumbled after a senior OPEC delegate said Saudi Arabia and other big exporters were likely to raise production if the price of U.S. benchmark crude WTI stayed at or above $25 a barrel on fundamentals. ``That story put a lid on this market,' said Nauman Barakat, a trader at ABN-AMRO Energex in New York. ``The market is very agitated by this,' a senior dealer in London said. The OPEC delegate said producers would not rush to ease supply restraints unless WTI (West Texas Intermediate) was at $25 or more on a sustained basis, reflecting supply-demand fundamentals and not the result of speculation. ``The general trend among Saudi Arabia and other producers is that if prices stay high at $25 or above for (WTI) and there is a growth in demand and inventories are down, then the tendency would be an increase in production,' he said. ``If the oil price spikes and is the result of a shortage of oil in the market and a time of rising demand, then producers would be likely to increase before March' when a global output cut pact expires. Wednesday WTI crude was trading at around $24.64 after spending the past two weeks above $25. Three rounds of production cuts totaling nearly five million barrels per day (bpd) by OPEC and some non-OPEC exporters have rescued prices from below $10 late last year. But rapidly falling inventories ahead of the peak demand in the northern hemisphere winter has raised questions over whether producers will be forced to raise output. OPEC and other producers are under pressure to secure long- term price stability and establish sound market management. Prices had firmed earlier after the American Petroleum Institute (API) industry group reported that U.S. crude inventories had declined for the third consecutive week. Aziz Reiterates Rejects Stopgap Oil Phase Further support came from Iraqi Deputy Prime Minister Tareq Aziz who reiterated Iraq would not accept a U.S. proposal for a one-week extension of Iraq's U.N. oil-for-food deal. The proposal is aimed at providing the U.N. Security Council with more time to consider ways to get U.N. arms inspectors back into Baghdad after a year's absence. Speaking in Moscow, Aziz said only a six month extension of oil-for-food was reasonable for Iraq, allowed to export crude subject to U.N. monitoring under the three-year-old arrangement. Iraq's position raises the prospect of a third consecutive week without Iraqi exports and more tightening of global supply. Iraq earlier this month sent prices to nine-year highs when it rejected an earlier proposed two-week extension and halted its 2.4 million barrels per day (bpd) exports. The Security Council has until Saturday, when the two-week extension runs out, to renew the oil-for-food deal. In addition, Iraqi Oil Minister Amer Muhammed Rashid, speaking in Jordan, reiterated Baghdad's rejection of a Western-backed comprehensive draft resolution as the basis of discussions on overall Iraq policy at the Security Council

To: Broken_Clock who wrote (55741)	12/1/1999 11:31:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

Papaya; I think we can break at any moment, but at least by next 1-2 weeks API's ... with yet another another 3-5 M boe draw, that will bring them to that 'ole fashioned religion. Also, all we need is the weather to cooperate a bit - merely for a sentiment shift. I'm hearing that the big money "momenteum" crowd is looking at the oilpatch here - watching how crude behaves; and is nervous as the proverbial "Whore in Church" about NASDQ & iNet valuations here... all we need is something, anything - to trigger that move. It could be a move up in crude, or nat gas, a news event,or weather etc, or something in the overall market as a negative catalyst; either strong profit taking, more talk to the likliehood of another rate hike, a big move in the bond market etc - which is very likely imho . We will have strong driving season draws here from all the Holiday travel & initial week of Xmas Shopping etc. We will continue to draw down at about 6 M boe per month imho - even with moderate weather; so worst case scenario - is another 6 weeks before we turn & have a coiled spring bounce. I think it happens by Xmas however and we will trade in a narrow range here - that is why I am not waiting when I see XTO under $10, UPR under $13, PXD in the low $8's - OEI mid $7's etc - we aren't going much lower, if lower at all imho in the E&P's, maybe a bit more in the OSX as its held a little better here. I really like seeing the institutional buying interest here. We are still seeing 100K buy blocks here with regularity. The hardcore energy funds are buying smartly here. But, they are in & out; trying to time the turn around here. There are lots of shorts - that will also magnify the initial move here imho. Nat Gas is not as bad as the shareprices would reflect here. Ask ANY E&P company if they would have been happy with $2.20 Dec Nat Gas & $2.30+ Jan Nat Gas earlier this year? They would have been VERY happy - and obviously so; as they hedged at $1.85-$2.00 through year end here in many cases... This is STILL a very positive Nat Gas price environment! It simply makes no fundamental sense for NBL to be near a 5 year low and right back to price levels of last January when it was looking at $1.75-$1.90 Nat Gas. Especially so; since many companies now will enjoy the flip side to that "double edged sword" efffect from hedging. Interestingly enough; these companies were propelled to highs here this summer into Sept - when they had under the market Nat Gas hedges & actual price realizations of $1.90ish in effect ! NOW ! - when they are hedged above market prices and will ACTUALLY receive higher Nat Gas prices than they did all damn year ($2.25-$3.00) - and they sell off 30-50% !?!?!?! - go figure ? When the Street's allows sentiment alone to effect the price to fundamentals relationship to this degree, or when because of rotational outflows; this anomalous price to fundamental & commodity price relationship exists - I will make huge, huge bets against the grain. This can not and will not last; never has - never will. It takes some guts and a little insight to recognize market anomalies for what they are. PS:O/T I am not trying to start another "electronic food fight" here; but notice the total absence of all the monday morning quarterback , ankle biting critics here... They NEVER make a call, share any opinion, or analysis. They merely cherry pick minor individual calls and nick away... never to been seen, or heard from in the heat of the battle; only to slither out of their cold, dank holes after the dust of battle has settled (VBG). Where are the critics now ? The time to bite my ankles is now folks; stand up and tell me how much lower we are going and why - what you are selling, or shorting and why etc... or save the penny ante-pissant monday morning QBing the next time...

To: Broken_Clock who wrote (55741)	12/1/1999 11:44:00 AM
From: Braddock Bull	Respond to of 95453

"It's the CapEX Stupid" Not too too long ago, we were all saying that $25 would wake up the Street. Now we hear $30 will do it. I maintain that the crude price is not so much the key right now... it's the sustainability of these prices and the anticipated CapEx increases which mean earnings for the OSX. The Street is convinced of neither. The notorious spin machine has established the mindset that crude will eventually dive sub $20, probably in March with any production increases. Against that background, and coupled with the lack of any real confirmation of CapEx increases or rising dayrates, we've got an OSX stuck in a fairly wide trading range. Traders have had an absolute field day with these stocks, just rolling them up and down with a wink and a grin. Meanwhile, the DOW and NAS are hitting new highs and position traders in this sector are left feeling most frustrated. Oh well, I guess it really does pay to be nimble and diversified. Anyway, I'm chanting a new mantra... "It's the CapEx Stupid". I'm convinced that sustained crude over $20 will bring it, but it sure is a long time coming. Good luck all. Hold 'em if you got 'em. Brad