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To: Czechsinthemail who wrote (18881)	4/13/1998 1:35:00 PM
From: Broken_Clock	Read Replies (2) \| Respond to of 95453

Baird...It would also seem that "disinflation" is not the trend in the DOW...but it might become a problem. Oil is down which has pushed the DOW higher recently. Today the DOW hasn't responded at all. It wouldn't surprise me to find that Lehman is sellinginto strength on all the merger news, or at the very least selling deep in the money calls. If you did that with the CCI news you could have reduced your basis on CCI from 144 to 120 in a week!

To: Czechsinthemail who wrote (18881)	4/13/1998 2:41:00 PM
From: Challo Jeregy	Read Replies (1) \| Respond to of 95453

NOESIS report for this week: April 13, 1998 Weekly Forecast Crude Oil Crude Oil -- As predicted, the U.S. inventory continued to climb, increasing 1.5 million barrels, from 329.7 to 331.2 million barrels. All of the increase occurred in regions east of the Rockies. Part of the increase can be explained by the reduction of input to crude stills in the Midwest and Gulf Coast regions coupled with already planned crude oil imports and steady local oil production rates. Crude oil stocks in the west were drawn down 2.6 million barrels, which may explain why the price of Minas crude oil increased in a market where the price of almost every other crude oil decreased. Minas is one of the crude oils typically imported into California. It's high API gravity (34) and low sulfur content makes it an excellent choice for making gasoline. Crude oil prices moved lower in a fluctuating market. Prices increased on Thursday, April 9 on the news that U.S. gasoline stocks had dropped by 4 million barrels. Speculators failed to spot the cause of the decrease: refiners cut back throughput to crude stills, made less gasoline and had to dig into their inventories to supply their markets. This condition does not translate to increased demand for crude oil. Crude oil prices should continue to be low well into the fall and probably until this time next year. Overall, input to refineries in the U.S. decreased from 7.97 to 7.33 million barrels per day even though there were decreases in the East. Utilization remained steady, dropping a tiny amount from 94.7 to 94.6% operable capacity. Gasoline production increased on the Gulf and West Coasts. Concurrently, gasoline imports jumped to 636 thousand barrels per day and gasoline stocks were drawn down in all regions. The Spring run for gasoline has begun, but it appears that the refiners are not able to maintain operation at the levels required to keep up. The availability of low priced imports should make any minor refining problems east of the Rockies irrelevant in the current market. Midwest refiners may be experiencing difficulties due to the Mississippi tugboat guide strike. If products are not moving up the Mississippi there could be a temporary shortage of gasoline in the Midwest which may translate into local price increases. To date, there does not appear to be a significant problem. East Coast Gasoline and Heating Oil East Coast - Inventories decreased in PAD 3 (Gulf Coast) from 64.6 to 64.4 million barrels, in PAD 2 from 55.3 to 53.3 and in PAD 1 from 58.7 to 57.5 million. Input to crude stills dropped in PADs 2 and 3 and remained flat in PAD 1. Heating oil inventory levels on the East Coast increased from 44.1 to 44.8 million barrels, and inventories in the Gulf Coast and the midwest dropped slightly. Continued high inventories of distillate should insure continued low prices of diesel and heating oil well into the summer. The price of regular gasoline and diesel held steady in all eastern areas. The supply of gasoline, and crude oil to make gasoline, is still plentiful, so there is no reason to expect the price of gasoline to increase significantly beyond seasonal fluctuations. (See Tip 5 on the Tips Page for explanation of price increase leading up to Memorial Day.) West Coast Gasoline and Diesel Forecast West Coast - Crude oil input to West Coast refineries increased from 2.51 to 2.55 million barrels per day and crude oil stocks were pulled down a total of 2.7 million barrels in PADs 4 and 5 combined -- 2.6 million in PAD 5 alone. Production of gasoline and diesel increased while the production of residual oil decreased from 246 to 196 thousand barrels per day. Inventories of gasoline and residual oil decreased, but diesel stocks grew from 11.2 to 11.6 million barrels. The West Coast system is balanced. Demand for gasoline is increasing which will put pressure on refineries to increase utilization. Stocks of residual oil in PAD 5 werepulled back down from 7.2 million barrels to 6.8 million, still a high level for refineries in this area but the refiners seem to have residual oil production under control. Total refinery capacity in PAD 5 is 2,964,900 barrels per day. Input was 2,553,000 bpd, or 86% capacity, which is still significantly lower than the national average or 94.6%. It appears that West Coast refineries could be putting enough product on the market to match the increasing demand. Instead, current conditions (short supply, no apparent competition) suggest prices will continue to rise and can remain high through the summer. The average prices of gasoline and diesel increased. With diesel prices higher than gasoline, it is possible that refiners may choose to upgrade diesel to gasoline just to keep the supply of diesel tight so they can maintain the higher prices. EIA Reported the average price of regular gasoline on the West Coast increased from $1.09/gal to $1.10 per gallon. The average price in California was also reported to be $1.10 per gallon. (My imput: that is correct) The price of diesel on the West Coast increased from $1.12 to $1.13 and from $1.21 to $1.22 in California. Prices can easily bounce back up to $1.20 per gallon for regular gasoline on the West Coast by June. As the price of gasoline rises this spring, refiners will probably increase the cost of diesel to maintain the existing margin between gasoline and diesel. Imports Imports - Gasoline imports jumped up, but the four week average only increased a small amount. A jump in one week may simply reflect the concurrent arrival of a few large shipments. If imports were to remain at the 600,000 bpd level, refinery production rates would decrease significantly and crude oil stocks would increase, indicating a shift to reliance on imported product rather than U.S. refined product. copied from oil-gasoline.com