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Gold/Mining/Energy : GENTRY RESOURCES LTD. (GNY.B - TSE) -- Ignore unavailable to you. Want to Upgrade?

To: rajaggs who wrote (562)	9/11/2000 9:20:48 PM
From: rajaggs	Respond to of 601

From CBS Market Watch - on energy (edited for brevity). >> Oil service stocks near three-year high Oil futures close above $35 as output hike seen too small By Myra P. Saefong, CBS.MarketWatch.com Last Update: 4:13 PM ET Sep 11, 2000 NewsWatch Latest headlines NEW YORK (CBS.MW) - The oil service stocks index rallied to its highest level in nearly three years Monday, with analysts upbeat over future prospects for oil companies as crude prices traded at 10-year highs. On Sunday, OPEC members, excluding Iraq, agreed to boost crude-oil output by 800,000 barrels per day to 26.2 million barrels per day starting October 1. "We think this increase comes too late to solve the oil market's immediate problem: lack of heating oil," said a research note from Carnegie analyst Rachid Bendriss, who is based in Oslo, Norway. The oil market continues to be "product-driven," according to Christopher Stavros, an analyst at PaineWebber, and companies with greater exposure in refining, retail market and petrochemical will likely realize improving margins into the fourth quarter of this year. Oil prices top $35; output hike seen too small Crude futures rose above $35 a barrel to hit a new 10-year high Monday, lifted by concerns that OPEC's 3 percent production hike only legitimizes the cartel's current overproduction and won't be enough to build adequate U.S. heating-oil supplies for the winter. On the New York Mercantile Exchange, October crude climbed to an intraday high at $35.85 a barrel -- its highest level since it hit that same mark in November 1990. The contract closed at $35.14, up $1.51. October heating oil reached a new contract high at 106.90 cents a gallon, but settled at 104.98, up 5.49 cents. October unleaded gasoline added 2.3 cents to 97.35 cents a gallon. October natural gas gained 13.1 cents to $5.011 per million British thermal units. "The higher OPEC quota mainly legitimizes the cartel's current ‘cheating' and may only add another 100,000 barrels per day of new oil to the market," Stavros said in a research note. Most members have minimal spare capacity and output limitations, which could make excess production difficult to achieve, he added. The market's reaction to the quota increase signals investors' concerns that the hike is too late to build enough heating-oil stocks for the winter, said Phil Flynn, a senior energy analyst at Chicago brokerage Alaron.com. << Does this indicate a coming crisis scenario, when people realise that even an increase in output equivalent to 80% of Saudi Arabia's unused production capacity, is not enough to turn around the climbing price of crude.? US Energy Secretary Bill Richardson went to the Saudis and OPEC on bended knees to get that 800,000 bbls/day increase but now it's being described as "legitimizing the cheating of the cartel." Better watch out Bill, maybe the next change will be a reduction in output. It seems obvious now that even the Saudis have little excess oil to export at this time but are prepared to spend some money over the next year to ramp up production. I personally doubt that this is a long term solution. The suggestions by Quatari and Saudi ministers that taxes and perhaps highly stringent product specs, are somehow to blame for the price of crude oil is mystifying, to say the least. I think they have the cause&effect relationship confused. Sort of like beating the donkey on the head in order to provoke forward movement. The only taxes that could be eased are taxes on home heating oil, which is in short supply as that may well be a short term ailment but in the longer term, raising taxes will reduce demand and that is a better approach to correcting the perenially increasing imbalance between supply and demand. For OPEC to suggest that the US or Europe drop taxes or their minimal attempts to implement environmentally sound policies to cure the problem, is as insulting as suggesting that the OPEC countries are responsible for North America's overdependence on oil. 'jaggs