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

To: Richard Kerns who wrote (3915)	11/27/1997 12:59:00 PM
From: Bill Li	Read Replies (2) \| Respond to of 95453

Research alert on OPEC! The following are some of the reseach firms' stand on OPEC meeting: 1. Dentsche Morgan Brenfell "Cartel has widely ignored existing output goals by almost three million barrels per day. Any increase in OPEC's quota system would act to 'legitimize' a portion of the excess production". 2. Paine Webber Saudi thinks that there may be a need to cut the output of OPEC in 1998 and wants to cut from a higher level. 3. Nat West It has been and will still be Saudi's policy of maintaining market share and price stability. Their goals are: " 1. Oil prices must be high enough to generate sufficient income. 2. oil prices must be low enough on a sustained basis to stay at levels to maintain growth in demand, avoid inflation expectation problems, and prevent excessive growth in non OPEC supply." "Saudi Arabia is the key decision maker (at OPEC meeting) and they want to prices remain in the $18-22 band. Strong underlying demand and delay and declines in non OPEC output will also support prices. Any downturn will be short lived and we continue to expect average oil prices at $20". 4. Morgan Stanley "Supply and demand are projected to be well balanced in 1998, and with inventories normalized from demand starting from a low base, we remain possitive". "We would use amy weakness in the equities related to this factor to build positions in energy stocks". Draw your own conclusion. I do not expect dramatical change in oil prices or demand/supply balance in 1998. As for OPEC meeting, remember the original goal of forming this organization--- to prevent over production of oil so as to maintain the oil prices. Bill