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

To: jim_p who wrote (63596)	3/31/2000 5:34:00 PM
From: Tomas	Read Replies (3) \| Respond to of 95453

"Gas prices appear headed up", "Good times ahead for the service and drilling companies" "Non-OPEC production seems to rely heavily on deepwater drilling around the world" Oil Prices to Retreat, Gas Going Up HOUSTON, Mar 31 (energy24.com) - The prospect of crude prices beginning a slow slide downward, going from $25 in 2000 to $22 in the next year and $19 a barrel in 2002, was advanced by George Gaspar, a leading forecaster of industry trends, at an oilfield executives breakfast in Houston. The primary cause, of course, will be higher production anticipated from OPEC, said Gaspar, managing director of petroleum research for investment house Robert W. Baird & Co. Inc., in Milwaukee. Almost exactly two years ago, Gaspar correctly predicted that oil prices would fall to $11 in 1999 and then rise to $30 in 2000, both events coming close to his expectations. "On the other hand," he told 850 oil and gas executives, "natural gas prices appear headed up, mainly due to gains in gas turbine uses for generating power." These gas price increases seem likely to remain in force for the next two to five years, he added. He also forecast that much of the higher cash flow earned by large oil companies in the first quarter of this year will go into spending for exploration and production, mainly due to pressure from the public and government. He anticipates a higher rig count in the immediate future in both the United States and Canada. Drilling for gas continues upward, he said, but oil drilling is lower, especially in the shallow-water Gulf of Mexico and onshore. "For the oil majors, this cycle will be different," Gaspar said. "The continuing decline of excess productive capacity in OPEC nations is revealing." Possible questions that could arise, he pointed out, are these: how much more can OPEC produce and for how long? He noted a decline in surplus productive capacity in those countries over the past three to five years. Outlook for non-OPEC production seems to rely heavily on deepwater drilling around the world, Gaspar noted. From now until 2005, he pointed out, all these trends seem to indicate good times ahead for the service and drilling companies. For those seeking continued high crude prices, he cautioned that alternate sources of energy could well enter the marketplace if such continued for long.