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

To: Lucretius who wrote (14222)	3/9/1998 4:36:00 PM
From: Teddy	Read Replies (2) \| Respond to of 95453

A snip from my gal pal Mavis: Oil Price Outlook Turns Uglier By Mavis Scanlon Staff Reporter 3/9/98 4:11 PM ET The outlook for crude pricing is turning absolutely grim. The faint hope that OPEC producers would call for production cuts was dashed Sunday when Saudi oil minister Ali al-Naimi issued a warning to other OPEC producers that his country, the largest oil producer in the world, would do nothing to rein in its production when the main quota-busters in the cartel planned no cuts in their own overproduction. On that news, Brent crude, the international benchmark, fell to a four-year low Monday of $13.30 a barrel. U.S. crude markets responded early in Monday's session by dropping 56 cents. Light sweet crude for April delivery traded at $14.35 a barrel, down 56 cents, in New York Mercantile Exchange trading. This comes on top of Friday's 44-cent drop.... ...Crude markets had been attempting to form a bottom in recent weeks around the $16-per-barrel level, but pessimism about OPEC action has fed sellers in recent days. If OPEC takes no action, an oversupply estimated at between one and two million barrels a day could keep prices depressed for months to come. In fact, Goldman Sachs' London-based energy group estimates it could take 18 to 24 months for the crude market to right itself if OPEC takes no action to rein in production. As we approach the second quarter, and the fourth month of depressed crude prices, many crude market analysts agree with that bearish picture. "My view is there will still be a surplus of crude oil in second and third quarter regardless of what they [OPEC] do," says Tim Evans, senior energy analyst at Pegasus Econometric Group. Given the present levels of OPEC overproduction, Evans says, even if the cartel, which supplies roughly 38% of the world's oil, does move to rein in those extra barrels, there will still be a huge surplus to be soaked up by the market....