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 : Scimitar Hydrocarbons, SIY:ASE -- Ignore unavailable to you. Want to Upgrade?

To: j.oil who wrote (735)	2/15/2000 7:33:00 PM
From: Yarek Szolomicki	Read Replies (1) \| Respond to of 864

NP j.oil - check this out Oil prices surged above the $30 US level Monday for the first time since January 1991 as indications that Iraq is to lower its exports added to continued worries about inventory levels. The price of benchmark West Texas Intermediate crude oil closed up 80 cents at $30.08 a barrel on the New York Mercantile Exchange, the highest level since the Gulf War. Analysts said the price rise is a result of the tight supply situation in the U.S. where inventories are at 23-year lows. "It's the tightest supply and demand balance that we've seen in many years," said Henry Cohen, an oil and gas analyst with Credit Suisse First Boston in Toronto. Cohen also said if OPEC continues the existing production cuts through the summer months, it will ensure the price will stay between $25 and $30 for the rest of the year. While the high oil price is boosting cash flows, it isn't leading to increased investor interest in the oilpatch. Greg Stringham, vice-president of the Canadian Association of Petroleum Producers in Calgary, said the lack of new investors is hurting the smaller companies that have finished paying down debt and want to expand their capital expenditure programs. "Typically, the oil and gas companies will reinvest $1.50 for every dollar generated from cash flow, with the extra 50 cents coming from the equity market. But without the equity market, it's hard to get that level of reinvestment," said Stringham. The industry will be watching closely when the members of the Organization of Petroleum Exporting Countries meet in March to see whether production cuts will continue at current levels. OPEC needs to figure out how to gradually return the oil price to the more sustainable $25 level, said Duncan Mathieson, an analyst with Scotia Capital Markets in Toronto. As the oil price soared, so did oil stocks, with Toronto Stock Exchange's oil and gas producers index gaining 239.76 points to close at 4913.05 while the broader oil and gas index rose 226.57 points and closed at 5835.36.