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

To: James Oyer who wrote (62150)	3/15/2000 12:03:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Opec Faces Headache Of Soaring Oil Demand - Lloyds List, March 14 CAN the Organisation of Petroleum Exporting Countries provide the solution to the growing imbalance between oil supply and demand? It seems that the general consensus within the market is a resounding no in answer to that question. Bunker rates reached record nine-year highs during the last week, with Brent crude prices surpassing the Dollars 31 per barrel mark and the knock-on effect for freight fixtures has been obvious throughout the market. The Opec summit to be held in Vienna later this month, on March 27, and the potential for agreement to raise oil output, was initially believed to be the ultimate solution to lower oil prices. Now it seems that even Opec, strong as the cartel is, cannot actually rectify the problem. World economic growth is predicted to rise by 3.7% this year, which translates to a 2.1% or 1.6m barrels per day increase in oil demand for 2000. Given that non-Opec supply is estimated at 45.6m barrels per day, Deutsche Bank Alex. Brown concluded that the required increase must come from Opec producers. 'With demand rising and the urgent need for inventory rebuilding, Opec taps must open further or schedule another increase later in the year,' it pointed out. Already this year Opec's output is below last year's average. This has been blamed on declines in Iraqi supply, the reasons for which are still unclear. If this decline continues, Opec oil output increases alone will not be enough to replenish stock deficits. An estimation offered by Deutsche Bank said that Opec would have to increase production by an astronomical 2.3m barrels per day, beginning in April, in order to satisfy the soaring demand and fill depleted stores. The Paris-based International Energy Agency shares these views. 'To get crude and product stocks back to the seven year average (1990-1996) Opec would need a rise in crude production of about 2.3m bpd,' their monthly report said. ...

To: James Oyer who wrote (62150)	3/15/2000 12:20:00 AM
From: ItsAllCyclical	Read Replies (1) \| Respond to of 95453

>> E&P sector new business/market metrics?? << I read that too. It had some interesting points, but I've heard them before. It's too early to say if that was/is the cause in the lagging E&P's. We have oil prices that shot too high too fast in people's minds. Not a problem for the service sector since anything after $18 almost doesn't matter, but more of an issue for the commodity sensitive E&P's. We also have created a market where the value investor and all value stocks have been getting killed. If E&P's continue to lag 1-2 years out and don't come back to their former levels and exceed them, then maybe I'll reconsider the articles points. I think the E&P sector will become more fiscally responsible (similar to the integrateds) but I don't think we've entered a new era of valuation of this subgroup. His thinking is somewhat in reverse in my opinion because he's looking backwards not forward. Looking forward fewer large oil fields are being found, the world economy is kicking on all cyclinders, OPEC has stated they want a higher long term price and congress I bet may consider measures to decrease our dependence on OPEC (Bush is on TV talking about just that right now). E&P's would receive higher valuations if congress established some sort of floor or subsides to encourage our domestic drilling industry. Let's not forget the growing market for natural gas during the next 20 years.