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To: SliderOnTheBlack who wrote (63060)	3/27/2000 12:30:00 PM
From: ItsAllCyclical	Read Replies (2) \| Respond to of 95453

Slider, I agree with your points and would like to add that an increase of 1.7 keeps getting floated around today on CNBC. I think 1.7 increase or a 1.5 is already priced in. Iran is the hold out (supposedly) and wants less. So the finally number will be bullish or very bullish imho. OPEC is also (per CNBC) going to meet in June to review the cuts. To me this says OPEC will not let oil prices crash back to $18. This will add to the "floor" effect. Add to that the oil has already come down 20% and I think you have a great buying op in selective issues. The XOI and OSX acting weak today on light volume tells me we're far more likely to rally on the news then sell off. Had we seen OSX 120+ prior to the OPEC meeting I'd definately be trimming. Adding more MRO May 20's today and just bought some BSNX May 12.5's for 1 3/8. In general I would not be buying any April calls here (in any issue), but the May calls look very nice for aggressive investors while still providing enough time in case we get an OPEC surprise. FST May 7.5's are trading for 2 3/8. Bought BSNX instead but the FST look good too. MRO, OXY, PGO, FST, BSNX look to have little downside and nice upside regardless of OPEC meeting.

To: SliderOnTheBlack who wrote (63060)	3/27/2000 12:40:00 PM
From: jim_p	Read Replies (2) \| Respond to of 95453

Raymond James Energy "Stat of the Week" Don't Let the Smoke and Mirrors Obscure Your View of the Global Oil Markets By the time you read this piece on Monday morning, OPEC will have probably already increased their production anywhere from one to two million barrels per day. On a short-term basis, a quota increase of two million or more would likely send oil prices sharply downward, while an increase of one million or less would likely lift them nicely. Even though rumors leading up to this OPEC meeting have created substantial volatility in the oil markets over the past two months, we encourage energy investors to focus on the fact that the oil markets are rapidly tightening and that the end of 2000 could mark the first truly balanced oil market that we have seen in nearly three decades. In other words, any production quota changes that precipitate from this OPEC meeting will only be considered short-term noise that may obscure the underlying strong oil fundamentals. Unfortunately, the market tends to obsess about the near-term implications of OPEC's production quotas, therefore, we believe it is worthwhile to point out a few important OPEC-related issues that may not be fully appreciated by the market. First, we believe that OPEC's true production capacity is not nearly as high as their stated production capacity. It is our belief that when the first round of cuts were made, many countries purposefully overstated their production capacity in order to get higher post cut production levels. Because of this, we think that two key things will become apparent in the months following the OPEC quota changes: 1. Total OPEC production will probably not increase as much as the quotas will increase; and 2. OPEC compliance percentages will likely increase as some countries begin to hit the wall on their production capacities. As shown in the following table, we believe that OPEC's true excess productive capacity is approximately 4.4 million barrels a day as opposed to a stated excess capacity north of five million barrels per day. Perhaps, more importantly, the table shows that although we believe that OPEC will increase quotas by about a million and a half barrels per day, the net increase in actual production will be closer to 1.0 million barrels per day. Jim