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

To: Jonathan Wang who wrote (4742)	12/10/1997 2:05:00 PM
From: tyc	Respond to of 95453

hi, do not have any doubt about oil drl/srv industry. Put your money on most promising stock -- any onshore, offshore, equip and services. You will become rich next year. This is the only sector in current market that provide sure upside return. Dec is the only time that you can buy drilling stocks at this level. Don not touch tech and stay cool on oil. good luck

To: Jonathan Wang who wrote (4742)	12/10/1997 2:05:00 PM
From: HH	Respond to of 95453

Subject: $15/bbl oil Date: Tue, Dec 9, 1997 11:24 EST From: Grizzlbob Message-id: <19971209173101.MAA13285@ladder02.news.aol.com> London Centre for Global Energy Studies predicts $15/bbl by 3Q 1998. - GRIZ From O&G Journal: Market Hotline December 3, 1997 ÿ OPEC goes for market share grab with new accord as Kyoto confab starts OPEC has thrown caution to the wind and opted for a hefty increase in its production ceiling. The upshot is that, whether Iraq resumes exports by first quarter 1998 or not (it's almost a given that the resumption won't occur before the end of December, given U.N. approvals, etc.), there will be to much oil on global markets to start the new year. And that means lower oil prices. OPEC is already saying that it is confident market demand will grow enough in the first quarter to absorb all this extra oil-which London's Centre for Global Energy Studies puts at 400,000-700,000 b/d surplus to demand for OPEC oil alone. But that's a bit disingenuous; currently, prospects are for an increase in demand that would be accommodated by inventory drawdowns, increased non-OPEC output, and the OPEC volumes already surplus to current quotas, with the relative tightness of the market to be determined by when or if Iraqi oil is again available and how that would square with weather-induced demand spikes. So, assuming that winter weather is normal and Baghdad keeps its oil off the market for part of the next quarter, that probably would have meant a strong inventory drawdown that would have pulled prices up from current levels by a dollar or two-certainly not a major spike. The likelihood of that price increase now has been wiped out with the OPEC quota accord, which certainly will mean some additional cheating even beyond the new ceiling levels (see table). Now the question becomes: How far can prices fall? So we return to the earlier scenario of the respective whims of Saddam and Mother Nature. CGES reckons that the call on OPEC oil in first quarter 1998 will be about 27.4 million b/d, assuming a normal winter, while the call on OPEC in first half 1998 will be about 27.1 million b/d. At the same time, if Iraq resumes exports under the oil-for-aid deal, then its production jumps to 1.3 million b/d, which pushes OPEC output to about 28.5 million b/d, by CGES estimates. If Saddam gets contrary again and suspends oil-for-aid sales (that's a strong possibility), then Iraqi output drops to about 600,000 b/d, effectively negating exports. This pulls OPEC production down to 27.8 million b/d. That works out to a surplus in the first quarter of about 1 million b/d with Iraqi oil and about 400,000 b/d without Iraqi oil, with both figures to swell in the second quarter. Accordingly, CGES figures Brent will average about $18.80/bbl in the first quarter without Iraqi oil, dropping to $17/bbl in the the second quarter and $15/bbl in the third quarter. With Iraqi oil, Brent falls to about $18/bbl in the first quarter and $15/bbl in the second quarter. Houston analyst Hornsby & Co. sees the quota accord as resulting in a net increase of 740,000 b/d over October levels-assuming an Iraqi oil-for-aid deal rollover that won't begin before the end of the year-which would put WTI at a range of $17-21/bbl during fourth quarter 1997 and first quarter 1998. Of course, an oil price of $15-16/bbl (for Brent-WTI) would spark a crisis within OPEC and a probable emergency meeting to ratchet quotas back down. All of which begs the question: Why? Is this simply a market share grab, especially as more non-OPEC oil (notably costly-to-produce non-OPEC oil from the North Sea, Colombia, and deepwater Gulf of Mexico) looms on the near horizon? Or is this also a canny move to take more of the wind out of the sails of the Kyoto global warming conference? Lower oil prices heading into winter weather certainly can't hurt OPEC's image at a time when the rest of the world is trying to beat up on fossil fuels. It is likely no coincidence that OPEC has taken out a half-page advertisement in London's Financial Times that its membership-which consists of developing nations-also would be entitled to financial compensation for any extra costs borne by a global warming treaty, as is envisioned in treaty articles specifying compensation for certain developing countries hit hard by the treaty's implementation. In other words, OPEC is hinting that it might pursue claims for restitution if a global warming treaty squelches oil demand to the point where its members' economies might be crippled. So it seems that now is as good as any time to go for market share, especially with the uncertainty over Iraq. It could just be that oil prices will fall just enough to stall further North Sea development as well as mitigate fallout from Kyoto, followed by another-almost inevitable-dustup between the U.S. and Iraq that will spike oil prices enough to welcome another OPEC output increase. It looks like 1998 will be another rollercoaster ride for oil markets. I found the reference: London Centre for Global Energy Studies The post in the MF board in Oil & Gas references the study and quotes from it. dec 9th post Predicts: 15 by 3rd qtr 98 without iraqi oil and with Iraqi oil 15$ by 2 nd qtr 98 HH