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

To: Bruce L who wrote (64232)	4/11/2000 8:37:00 AM
From: Ken Ludwig	Read Replies (1) \| Respond to of 95453

Crude stocks build in Q2 but IEA expects shortfall later By Matthew Jones - 11 Apr 2000 08:49GMT A moderate build in world oil stocks is now expected in the second quarter of the year following last month's production-lifting agreement by the Organisation of Petroleum Exporting Countries. But the International Energy Agency's monthly oil market report, published on Tuesday, said significantly more oil will be needed in the second half of the year to meet expected demand growth and keep crude prices at a comfortable level. The IEA says Opec appears to have engineered a "soft landing" for crude prices which had been approaching $30 a barrel due to dwindling stocks caused by production cuts. Opec lifted production by 1.72 million barels a day from April 1 after three days of talks in Vienna. Since then the price of May Brent crude has fallen to $21.30 a barrel and New York light crude settled on Monday at $23.85. Estimated first quarter oil demand has been reduced by 0.6mb/d due to warm weather, higher than expected non-Opec supply and barrels stored last year in anticipation of Y2K disruption being used up. Because of this, the predicted global stock draw in the first quarter is now much smaller than the 2.0 mb/d previously forecast at 1.1 mb/d. "Current estimates of supply and demand for the second quarter would allow a stock build of 0.6mb/d, replacing more than half of the stocks run down in the first quarter," says the IEA. However, the Paris-based agency warns that quarter-on-quarter growth in gasoline and other product demand in the US and Europe and a 0.4 mb/d rise in demand from OECD Pacific countries in the third quarter will fully absorb the projected second quarter stock increase. "To balance supply and demand and to continue to rebuild stocks, almost 1.0 mb/d more oil would be needed, given current estimates, with about 220,000 b/d of that for stock building." Saudi Arabia, the largest Opec producer, has already indicated that it is opposed to any further increase in production at the next Opec meeting on June 21. A Saudi oil official was reported on Monday saying the kingdom could even call for fresh production cuts if the oil price continues to fall too far.