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Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (282)	9/18/2000 5:37:04 PM
From: Mark Adams	Read Replies (1) \| Respond to of 350

Might look at SPIR as an alt energy play. No position there currently- but possibly interesting play. Some evidence of attempted pumping on the Yahoo alternative boards. An unusual perspective on future oil prices: Oil output hikes totaling 3.2 million barrels a day this year by OPEC have failed to knock global prices off 10-year highs, the report said. The cut must come early in 2001 if OPEC wants to avoid a slump in crude prices, the London-based analysts said. The precise size and timing of the move will depend on the severity of the coming winter. "The crude market is slowly rebalancing itself as more oil heads for the refining areas," said CGES. "OPEC will need to cut production next year; the question is when and by how much." As a result of three increases in production targets this year, OPEC is expected to produce 29.3 million b/d in October, CGES said. A "normal" winter would require the group to reduce output by 1.8 million b/d early in the second quarter of 2001 to achieve an average price of $24.30 a barrel for benchmark North Sea Brent futures in 2001. Saudi Arabia, OPEC's largest producer, said it prefers oil prices around $25/bbl. Front-month November Brent futures on London's International Petroleum Exchange were trading just north of $34/bbl midday Monday. A mild winter would require an earlier OPEC cut, while a cold winter would require a brief output reduction in the second quarter of 2001, followed by a return to 29 million b/d by the third quarter, CGES said. If OPEC chooses not to cut output, Brent will drop to $15.30/bbl in the third quarter of 2001, and to $12.80/bbl by the fourth quarter. "The crunch will come early in 2001 when winter demand begins to ease, and crude stocks have been replenished," CGES said. "OPEC will need to act quickly once prices start to fall if it is to engineer a 'soft landing."' OPEC's failure to raise output early this year prevented refiners from rebuilding distillate stocks, which were low at the start of the year, CGES said. When new OPEC oil did reach the markets, it was needed to maintain stock cover. As a result, U.S. distillate stock cover should remain around 30 days through the end of the year, three days down from 1999. However, with OPEC output at 29.3 million b/d, global crude inventories will build by 2.2 million b/d in the first half of 2001, pushing Brent down to $20/bbl if OPEC fails to cut back. "With refiners running flat out, the market cannot absorb much more OPEC crude, and CGES expects prompt prices to weaken abruptly once winter demand has peaked," the monthly report said. -By Jim Efstathiou, Dow Jones Newswires; 44-20-7842-9250; jim.efstathiou@dowjones.com Now if this were to come to pass, would the alt energy players see the same downside as they've seen recently on the upside?