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

To: Jack Be Quick who wrote (21064)	5/1/1998 5:59:00 PM
From: Shelia Jones	Respond to of 95453

"traders didn't want to be caught with their pants down during the weekend" Friday May 1, 4:57 pm Eastern Time NYMEX crude ends over $16 on producer meeting hope NEW YORK, May 1 (Reuters) - NYMEX crude oil futures soared Friday -- closing above $16 a barrel -- on speculation of a possible meeting among the Riyadh Pact group of Saudi Arabia, Venezuela and Mexico. The June contract settled at $16.13, up 74 cents from Thursday's close and nearby months also posted hefty gains. June heating oil settled at 45.78 cents a gallon, gaining 1.57 cents, while June gasoline settled at 54.29 cents a gallon, up 1.83 cents. Jim Fiedler, an analyst at E.D. & F. Man International Inc., said traders moved on the belief that there would be a meeting among the big producers to take up the issue of further production cuts. Although no confirmation could be had, ''traders didn't want to be caught with their pants down during the weekend,'' he said. In the process, the speculation spurred buying at length, a lot of short covering or holding on to previous positions, he said. ''Between now and June, they (the producers) probably will have a meeting and they will probably make some cuts,'' Fiedler said. ''In the meantime, it's really hard to say what they will actually do,'' he said. The speculation on the possible meeting of oil officials from the three nations was bolstered by the presence of Saudi Arabian Oil Minister Ali al-Naimi in Houston, who was attending a scheduled board meeting of Saudi Aramco on Thursday. Al-Naimi is scheduled to meet with U.S. Energy Secretary Federico Pena on Monday in wide-ranging talks that include Iraq sanctions, climate change, current world oil prices and prospects for recovery, an agency spokesman said. The market extended gains around 1400 EDT/1800 GMT, when Mexico's Energy Ministry confirmed that Minister Luis Tellez and his Venezuelan counterpart, Erwin Arrieta, had met on Friday. A spokesman for the Mexican agency said the meeting was strictly between Mexico and Venezuela and that he had no information on whether al-Naimi would also meet with Tellez any time soon. Venezuela, Mexico and Saudi Arabia crafted the March 22 Riyadh agreement that called for the reduction of about 1.5 million barrels per day (bpd) in oil products beginning April 1. On Monday this week, Arrieta called for another 500,000 bpd cut to lift the still low oil prices and said he had talked with his Saudi and Venezuelan counterparts about the matter. Officials of Mexico, which is not a member of OPEC, have not said publicly if their country would support further output cuts. About six OPEC oil ministers have publicly said that they would support such an action. ''This is like March all over again,'' said a NYMEX floor trader. He was referring to the events that took place in mid-March, when Venezuela said it was seeking an agreement among OPEC and non-OPEC producers to cut oil production to rescue slumping oil prices. At the time, NYMEX crude had dropped to a nine-year low of $12.80 a barrel. It started a rally that culminated in the front-month contract jumping to $17.50 on March 23, following announcement of the Riyadh agreement. Since then, however, prices have eased on concerns over whether participants in the pact would stick by their pledges to cut production, amid a continuing buildup in oil supply.