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To: Gabriel008 who wrote (35234)	3/23/1998 8:31:00 AM
From: Mohan Marette	Read Replies (2) \| Respond to of 176388

Ref:Oil Production and OPEC. Promises,promises. Gabriel: The news form Riyadh about cutting oil production by 2 million bpd might certainly have an effect on oil companies and oil service companies. For the general market it sure is bad news at least temporarily. One important thing to keep in mind though is that according American Petroleum Institute oil supplies outweighs demand by 3% and besides these guys (OPEC) never keep their promises.They get together whenever the price drops and make all kind of announcements about production cuts and go home and start pumping more. OPEC as a cartel and as an institution has outlived its effectiveness and usefulness long time ago. If history in any indication Saudi Arabia will be the first one to breach the production quota,as 'poor' S.Arabians are running a Current Account deficit these days and they need to keep spending if the Royal family wants to keep their job and the other guys aren't any better.Another thing to remember is that Iraq might be allowed to pump more oil and that guy Hussain never listens to any of these OPEC guys as he is in desperate need for money,even the sanctions might be lifted partially if not completely in the not too distant future,far fetched idea but still a possibility. IMHO this is just a desperate psychological ploy to keep up the prices by couple of bucks even if the effect is going to be only for a short time and that is about the size of it.