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

To: Lucretius who wrote (6714)	1/6/1998 1:14:00 PM
From: SJS	Read Replies (1) \| Respond to of 95453

More analysis.... OIL STOCKS. The oil sector has hit a rough patch in the last couple of days as various Wall Street are lowering 1998 earnings estimates due to concerns that an over-supply of oil will drive down crude prices. Yesterday, the pressure on oil stocks began to build when an analysts at Schroder & Co. reduced his 1998 spot crude price forecast to an average of $18.00 from $19.00 per barrel. Analyst Michael Mayer of Schroder also said that there was increased risk that oil prices could drop into the $15 range in 1998 if OPEC does not curtail production or Iraq "resume its oil-for-food exports." Today, Goldman Sachs followed suit by lowering 1998 earnings estimates for various oil concerns due to similar price concerns, putting added pressure on the sector. Goldman cut estimates for Royal Dutch Petroleum (RD 52 9/16 -1 3/4), Texaco (TX 51 5/16 -1 7/16), Exxon (XON 59 7/8 -1 5/16), Mobil (MOB 68 13/16 -1 7/8) and Chevron (CHV 74 7/16 -1 1/4) from as little as 5% (XON) to as much as 12% (TX). On average, earnings estimates were reduced by 7% to 8% for 1998. Similarly, ABN/Amro Chicago Corp. cuts 4Q and full-year earnings estimates for Phillips Petroleum ( 45 7/16 -1 11/16) due to weaker than expected income generation from overseas operations. ABN/Amro cut Phillips 4Q estimate from $0.76 to $0.70 a share, while at the same time reducing full-year estimate from $3.45 to $3.40 a share. On a positive note, PaineWebber started coverage of Murphy Oil (MUR 52 1/2 -1 3/16) with an "attractive" rating, but this has not helped the stock as the sector in general remains caught in a state of uncertainty as while demand for petroleum products remains steady, particularly as American continue to purchase more energy consuming cars like sport utility vehicles, OPEC has not shown recently a willingness to curtail supply.