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

To: Bruce Russell who wrote (16796)	3/26/1998 11:44:00 PM
From: David Spruiell	Read Replies (1) \| Respond to of 95453

Norway decided not to cut production Thursday March 26, 8:04 pm Eastern Time FOCUS-Oil extends gains but Norway votes down cuts (Updates with closing price) LONDON, March 26 (Reuters) - Oil markets made fresh gains on Thursday in the expectation that OPEC will next week confirm a landmark output cut agreed with other producers. Even bigger price gains were wiped out after Norway's parliament rejected a proposal to respond to the Riyadh pact by reducing output by at least 100,000 barrels a day (bpd). Norwegian Oil Minister Marit Arnstad said she would continue to push for an output reduction despite the opposition of a majority in parliament. World benchmark Brent blend crude closed 27 cents a barrel higher at $15.40 as traders bet OPEC will agree to trim production in talks in Vienna on Monday. That is $3.50 a barrel up from a nine-year low touched earlier this month and marks a $2 barrel increase since the deal came to light. Dealers with long memories said the producer group that accounts for 40 percent of global output retained an alarming capacity to surprise. ''If the cuts are confirmed, the market will rally further,'' said one. ''If they aren't, they are going to have a rude awakening,'' he added, suggesting prices could sink back to recent lows. Recollections of previous price slides sparked by public OPEC rows will hover around the gathering as it prepares to bless OPEC's contribution to the deal with other world oil producers, delegates said. Under the accord, cuts from April 1 until the end of 1998 are expected from all Organisation of the Petroleum Exporting Countries members bar Iraq and non-OPEC producers Mexico, Oman, Norway, Russia, Malaysia and Eygpt, according to cartel sources. Cuts pledged so far amount to 1.4 million bpd, including 1.25 from OPEC producers. Russia says it will not cut. There have been murmurs of discontent in OPEC after Iran and Indonesia said they would cut output from their official OPEC output quotas, not actual production as is assumed under the pact. Since capacity constraints mean these countries can produce only below quotas established last December, their announced ''reductions'' would have no effect on crude supplies. Morgan Stanley Dean Witter said the agreement had come about because of producers' concerns over the price squeeze on revenues and because prices had made unprofitable much heavy oil production from OPEC members like Venezuela. The research team said the agreement ran counter to a common perception that production most at risk from low prices was in offshore non-OPEC areas such as the North Sea and Gulf of Mexico. ''The production most at risk from a falling oil price is located onshore and within OPEC,'' it said. A reminder of the crippling effect of low prices emerged on Thursday when foreign contractors in Saudi Arabia said state oil firm Saudi Aramco had been forced to review its spending plans on a series of refinery and oilfield development projects. Aramco, the world's largest oil firm, had scaled back or delayed projects to expand two domestic refineries and reviewed new facilities aimed at boosting local gas supplies. Uncertainty also lingered over likely Iraqi exports. The U.N. Security Council last Friday approved a measure more than doubling the amount of oil that Iraq can sell over six months from the current $2 billion, but Baghdad said it did not have the capability to export that volume. Prices in dollars per barrel: March 26 March 25 (close) (close) May Brent 15.41 15.14 May April light crude 16.86 16.48