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

To: Alias Shrugged who wrote (4025)	12/1/1997 9:05:00 AM
From: David Spruiell	Respond to of 95453

UK oil shares clipped by OPEC-inspired crude drop 4:51 am Eastern Time LONDON, Dec 1 (Reuters) - Shares in UK oil companies missed out on the sharp opening rally in the blue-chip index on Monday after a 10 percent increase in OPEC's production ceiling led to a prompt sell-off in crude oil prices. At 0926 GMT, with the FTSE 100 up more than one percent, oil majors British Petroleum Co Plc (BP.L) traded 1p higher at 811p and Shell Transport and Trading (SHEL.L) gained 7p to 410p. Shares in smaller oil exploration companies, who are more exposed to volatility in crude oil prices, were unchanged. Enterprise Plc (ETR.L) was up 1p at 585p and LASMO Plc (LSMR.L) 1/2p higher at 263-1/2p. ''I think the OPEC meeting with the decision over the weekend to raise quotas will be taken bearishly by UK oil shares, because the (quota rise) was slightly higher than they expected them to go,'' said David Stedman, oil analyst at Daiwa Europe. The Organisation of the Petroleum Exporting Countries (OPEC) on Saturday agreed to raise its official output ceiling to 27.5 million barrels per day for the first six months of 1998, from a long-ignored ceiling of 25.033 million bpd that stands to the end of this year. The agreement is the 11-member group's first major increase in official supply limits for four years -- and turned out to be a higher than expected hike. World oil prices fell sharply when trading resumed in Singapore on Monday, and traders braced for the open of crude oil trading on London's International Petroleum Exchange at 1000 GMT. At 0939 GMT, benchmark Brent blend crude oil was down 54 cents at $18.40 a barrel in Singapore. Coming on top of concerns over falling demand in southeast Asia, fears of warmer winter in the Northern Hemisphere due to El Nino, and the United Nations deal on Iraqi oil sales, some analysts expected the UK oil sector to underperform against the rest of the market in coming months. UK oil producers must also have to worry about a tighter North Sea tax regime, Stedman said. UK Finance Minister Gordon Brown said last week in a pre-budget statement that a ''fair and open'' approach to taxation was central to Budget consultations now under way, including that on the North Sea. ''I think the net effect will be that the UK oil sector will not perform well in the immediate future,'' said Stedman. Among other oil exploration companies, Monument Oil & Gas (MOG.L) shares slipped 1/4p to 85-3/4p and Premier Oil (PMO.L) was unchanged at 54-1/2p.