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

To: Tomas who wrote (60827)	2/24/2000 8:48:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Oil price expected to remain strong - Calgary Herald, February 24 By Chris Varcoe Despite mounting pressure on OPEC to open the world's oil taps, crude prices will remain strong through the year, averaging $25 US a barrel, says a leading U.S. energy analyst. And Canadian producers are poised to enjoy the upturn in prices more than their American counterparts, Wayne Andrews of investment banking firm Raymond James & Associates told a Calgary energy conference Wednesday. "We see a great six- to 18-month outlook for oil," the Houston-based analyst told about 200 oilpatch executives attending a seminar on gaining access to U.S. private capital. "Inventories have been driving pricing and we're seeing inventories at record lows." Crude oil, mired in the $12-a-barrel range just one year ago, has staged a remarkable price rally in recent months. Production cuts led by the Organization of Petroleum Exporting Countries last spring have led to dwindling global supplies, pushing oil prices to the highest point since the Gulf War. During the fourth quarter of 1999, the world consumed 76.9 million barrels of oil daily, but only produced 74.2 million barrels -- creating a shortfall of 2.7 million barrels per day, according to a new report by the Canadian Energy Research Institute. Pressure from the United States is now intensifying on OPEC to agree to production increases at its next meeting March 27, and there are signs the cartel will comply. In Canada, brokerage firms such as Canaccord Capital Corp. are more modest in their price outlook, projecting oil will average $21.25 a barrel this year, while Peters & Co. has forecast oil at $20 per barrel. "We may very well end up averaging $25," said Gord Currie of Canaccord. Andrews said the upcoming OPEC meeting is one wildcard that could change the direction of prices, along with Asian demand for crude. On the gas front, Raymond James also forecasts rising prices which should average $3 per thousand cubic feet (MCF) in the U.S. There is a strong possibility natural gas could spike above $3.50 per mcf later this year if North America endures a cold winter and inventory supplies don't pick up significantly through the summer, he warned. "I suspect we're going to have a shock," he said. "I've never seen the fundamentals this strong." Andrews expects Canada's energy sector will be one of the main beneficiaries of the upturn, due to more demand for natural gas, lower reserve replacement costs than in the U.S. and "huge netbacks" for Canadian heavy oil producers. calgaryherald.com