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

To: Richard Saunders who wrote (8532)	11/15/2001 2:56:25 PM
From: CIMA	Read Replies (1) \| Respond to of 24899

Canada energy stocks fall in oil-price tailspin CALGARY, Alberta, Nov 15 (Reuters) - Canadian energy stocks skidded 7.5 percent on Thursday as oil prices fell to two-year lows in the aftermath of OPEC's decision to delay output cuts until non-cartel members curb production as well. The dramatic drop in the Toronto Stock Exchange's oil and gas subindex <.TOG> came on the heels of Wednesday's 3 percent slide, and was made worse by sharply lower North American natural gas prices. Benchmark West Texas Intermediate crude sank $2.04 a barrel, or more than 10 percent, to $17.70, its lowest level since June 1999. Gas futures were off 13 cents per million British thermal units, or 4.7 percent, to $2.555 on Thursday. Duncan Mathieson, analyst with Scotia Capital Markets, said the brokerage cut its oil-price outlook to $17 a barrel in 2002 after Wednesday's surprise decision by the Organization of Petroleum Exporting Countries. It is too early to call the bottom for Canadian energy stocks, Mathieson said. "We've basically said that the appropriate decision here is to go stand on the sidelines until the game of chicken is over, and that's what we're in with OPEC and non-OPEC," Mathieson said. "We know there's too much oil, we're seeing inventories rise, and we know demand is sloppy. We need to see some discipline out of some suppliers and that's usually OPEC, and they've chosen not to do it," he said. The TSE oils were off about 670 points to 8261.34, as investors punished most severely those producers with large proportions of crude output. Talisman Energy Inc. <TLM.TO> fell C$6.55 to C$52, Alberta Energy Co. Ltd. <AEC.TO> fell C$4.40 to C$55.30, Suncor Energy Inc. <SU.TO> fell C$3.26 to C$43.29, and Petro-Canada <PCE.TO> sank C$3 to C$36.05. Expectations of sharply lower cash flow and capital spending among Canadian producers as commodity prices wilt also hit oil field service shares. Precision Drilling Corp. <PD.TO>, the country's biggest service concern, slid C$5.11 to C$33.20, while No. 2 rival Ensign Resource Service Group Inc. <ESI.TO>, fell 83 Canadian cents to C$11.92. Oil prices started the steep drop on Wednesday after OPEC ministers, meeting in Vienna, agreed to cut production by 1.5 million barrels a day, but not until Jan. 1 and only if non-OPEC producers, notably Russia, knuckled under and chopped about 500,000 barrels a day as well. Russia, the world's second biggest exporter after OPEC kingpin Saudi Arabia, has so far offered a only a token reduction of 30,000 barrels a day. (1=$1.59 Canadian) ((Jeffrey Jones, Reuters Calgary bureau (403) 531-1624, jeff.jones@reuters.com)) REUTERS * end of story *

To: Richard Saunders who wrote (8532)	11/16/2001 6:32:42 PM
From: CIMA	Read Replies (1) \| Respond to of 24899

Oil prices inch higher 11:19 EST Friday, November 16, 2001 London — Oil prices corrected slightly higher on Friday after plunging around $4 a barrel to fresh two-year lows this week as OPEC raised the stakes in a looming tussle with Russia and other rival producers. Brent crude futures were up 33 cents at $17.66 (U.S.) a barrel Friday afternoon in London compared to a closing price of $21.38 last Friday and a peak of $31.05 on Sept. 11 when hijacked planes attacked the United States. The Organization of Petroleum Exporting Countries (OPEC) fired the first shots of a possible price war when it decided on Wednesday not to cut output unilaterally to rescue flagging prices unless independent producers reciprocated. "OPEC has thrown down the gauntlet and the issue now is whether Russia will swiftly curb production," said Lawrence Eagles of GNI Research. If Russia does not respond quickly OPEC will have entered a price war "whether it likes it or not," he added. But on Friday Russian Prime Minister Mikhail Kasyanov, visiting Madrid, appeared in no mood to compromise. "No one can make any demands of us," the Russian RIA news agency quoted him as saying about OPEC's request for cuts. Separately, Mexican Energy Minister Ernesto Martens is expected to travel to Moscow on Monday to hold talks with Russian officials on oil output cuts, a Russian diplomatic source said on Friday. Mexico and tiny Oman are so far the only non-OPEC members to offer substantial oil export cuts to help support world prices. Confidence this week was initially knocked by the New York plane crash on Monday and reports showing a comfortable cushion of winter fuels across the globe. But prices took another tumble mid-week as the OPEC cartel meeting in Vienna said it would only make fresh production cuts if major non-cartel producers such as Russia, Mexico and Norway joined the effort to revive the sinking market. Mexico has offered to cut by 100,000 barrels per day (bpd) but OPEC has pinpointed Russia, the world's No. 2 exporter after Saudi Arabia, as key to any agreement. With more than one month before OPEC's January 1 deadline for a cut, the deadlock has left oil traders scratching their heads for near-term direction. "In one of the greatest showdowns, neither Russia nor OPEC have blinked as they face each other down over the issue of coordinated production cuts," said Simon Games-Thomas at NM Rothschild & Sons in Sydney. "I think I will let the crystal ball gather a little dust for a few days." The Organization of Petroleum Exporting Countries has delayed implementing output curbs of 1.5 million barrels per day until 2002 pending a new round of talks with non-OPEC exporters. OPEC wants 500,000 bpd of non-OPEC supplies off the market to bring total cuts to two million bpd from January 1, a volume it reckons is necessary to lift prices back above $20 a barrel. Traders fear the standoff might trigger a price war, although OPEC denies this, saying it is making an appeal to non-OPEC to help stabilize the market. The 11-member cartel has reduced output three times so far this year, slicing 3.5 million bpd off its production ceiling to keep prices buoyant as petroleum demand has waned because of the global economic slowdown and stocks have run into surplus. Now, it says, other producers should help shoulder the burden, especially as non-OPEC supplies have been on the rise. Mexico said on Thursday it would make its 100,000 bpd cut if OPEC and other producers also implement supply restraints. Norway, the No. 3 exporter after Saudi Arabia and Russia, appeared to ease its initial stance, saying on Thursday that it was willing to trim output to prevent a price collapse. Oslo said it would make an evaluation of the market and come to a possible decision next week. The toughest nut to crack appeared to be Russia, which had offered a token 30,000 bpd reduction out of a daily output of seven million barrels despite a lobbying visit by Saudi Oil Minister Ali al-Naimi. Mr. al-Naimi called Russia's position "extremely unreasonable." Mr. Kasyanov said he was unworried about the current weakness of the oil price. "These are market fluctuations, which have happened and will happen constantly and a calm attitude is needed," he was quoted as adding. He said a period of waiting was needed to make a proper judgement of what was happening on the market. Russia, Norway and Mexico announced output curbs in concert with OPEC during the 1998/1999 price crash when oil briefly fell below $10 a barrel. But Mexico was the only one of the three to make a substantial reduction in production. Kuwait warned on Thursday that oil could once again fall into single digits if non-OPEC producers refused to cooperate with restraints. "I wouldn't be surprised. Reaching $10 will be a hard hit for us all and even harder for those with higher cost of production," Kuwaiti Oil Minister Adel al-Subaih told reporters in Vienna. "There will be hard times to come in the form of low prices," he said. Copyright © 2001 The Globe and Mail