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

To: kormac who wrote (67252)	5/28/2000 12:25:00 AM
From: kormac	Read Replies (1) \| Respond to of 95453

Oil Industry Gathers in Malaysia By Raj Rajendran May 27 10:32pm ET KUALA LUMPUR (Reuters) - The oil industry gathers this week for a major meeting in the Malaysian capital in a better position than it has been for many years, basking in the glow of buoyant oil and share prices. Crude producers have been the biggest gainers but even refiners and marketers -- whose margins turned red for much of last year -- were in the black on the back of rising demand as Asia recovers from its economic crisis. ``They (oil shares) are the best performing sector in the United States since January 1, outperforming even the pharmaceuticals,'' Hong Kong-based HSBC Securities energy analyst Gordon Kwan said. A sign of the better times was the rise in the number of delegates for the Asia Oil & Gas Conference which is being held in Kuala Lumpur on Monday and Tuesday. With around 700 already registered, compared with 650 last year, industry sources said it would be the best turn out for many years, making it the largest regional gathering. ``We expect the final figure... to hit about 750,'' a conference organizer said from Kuala Lumpur. GOOD TIMES HERE TO STAY Now, with demand rising and stocks low in many parts of the world, the outlook for refineries has improved. Gasoline demand in the northern hemisphere is reaching its annual peak, which has fuelled the latest oil price rally to above $30 per barrel. ``The outlook for the sector from a fundamental stand point is better than for a number of years. The industry is in very good shape,'' said Merrill Lynch energy analyst James Brown. The International Energy Agency (IEA) in its latest monthly report said inventories in OECD nations fell to 2.43 billion barrels in March, the second lowest level of the last decade. The IEA said world oil demand in 2000 would grow by 1.5 million barrels per day (bpd) to 76.5 million bpd. Asian energy analysts estimated that half of the growth would come from Asia, taking total demand to about 19.5 million bpd in 2000. The Asian demand still lags refining capacity of around 20.7 million bpd but business conditions are improving, industry officials and analysts said. ``After a dip, demand is now coming back,'' Royal Dutch/Shell chairman Mark Moody-Stuart told a news conference in Kuala Lumpur ahead of the conference. ``Although there is an overhang in (refining) capacity, this will gradually be eroded and that should in due course improve margins.'' PRODUCERS, INTEGRATED COMPANIES MAIN WINNERS Analysts said growing demand for petroleum products have helped refining margins improve. ``They (margins) have improved in the last 12 weeks...its well into the black. We see them maintaining the recovery,'' said Brown. The biggest winners in the current oil price rally are producers and integrated majors, especially those based in the United States, where oil company shares have outperformed the overall stock market. ``Oil companies here are not doing as well as those in the U.S. because the sector is poorly understood,'' Kwan said. It took the Hong Kong market some time to warm to newly listed Chinese oil major Petrochina which fell below its IPO price of HK$1.27 to hit a low of HK$1.10 on April 26 before taking off to hit a peak of HK$1.65 on May 18. The share closed at HK$1.45 on Friday, up 13 percent since its April 17 debut compared with a 19 percent loss on the benchmark Hang Seng Index over the same period.