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

To: Broken_Clock who wrote (21723)	5/8/1998 5:39:00 PM
From: pz	Read Replies (1) \| Respond to of 95453

NEW YORK, May 8 (Reuters) - Market worries over the oil glut amid waning hopes for a quick OPEC action led to a late market sell-off Friday, slashing crude oil prices at the New York Mercantile Exchange (NYMEX). "There was a broad market selling toward the close," said a NYMEX floor trader, who added: "People who sold waited for the last few minutes, probably hoping for the day's lowest prices." June crude settled off 11 cents on the day at $15.13 a barrel -- exactly $1.00 down from the closing a week ago. July crude, which has shown strength over the front-month, closed at $15.07, down seven cents, after hitting a high of $16.05. On Friday last week, market speculation on a meeting between the Riyadh Pact group -- Saudi Arabia, Venezuela and Mexico -- to plan further output cuts lift crude prices to over $16 a barrel. Since then, the market has slid progressively as hopes waned that the three countries -- which orchestrated the 1.5 million barrel per day (bpd) output cut agreed to by OPEC and non-OPEC producers in March -- would meet soon. Thursday, Mexico's energy minister, Luis Tellez, said that under current conditions, Mexico will not make any further production cuts and that he had no meetings scheduled with his Saudi and Venezuelan counterparts in the near future. Traders said the news sparked the late sell-off on Thursday and further prodded people with long positions to liquidate on Friday. Moving in sympathy, refined products ended the week with losses. June heating oil closed at 43.01 cents a gallon, off 0.57 cent from Thursday and 2.77 cents from the previous week. Gasoline finished at 52.02 cents a gallon, down 0.17 on the day and and 2.27 cents from a week ago. "The market is still overwhelmed by what I call the Cushing oversupply phenomenon," said Hornsby & Co. analyst Nizam Sharief. West Texas Intermediate/Cushing is the benchmark crude grade for the U.S. "There is is currently too much oil, there are delivery problems and the contango has widened a bit," he said. "With all these and the waiting game at OPEC, I think the market is marking time until it learns positively of how the initial cutbacks were implemented," he said. He was referring to the reductions agreed under the Riyadh Pact, which went into effect on April 1. "It takes a while to find out if the cutbacks were followed," he said, noting that early reports have shown some participants complying while others are lagging behind. In contrast to NYMEX crude, IPE Brent crude closed the week 22 cents better at $14.69 after soaring to a high of $14.95 in a choppy last half hour fueled by spread trade. As for the coming week, other market watchers look to gasoline to pull the market up. "The driving season is just around the corner and with big demand forecast on gasoline, I expect it to keep the market up," said a Texas-based trader. Meanwhile, the market is focusing on a meeting Sunday among members of the Organization of Arab Petroleum Exporting Countries (OPEC) in Damascus, Syria. Saudi Oil Minister Ali Naimi, whose six-day visit to the U.S. that lasted until Wednesday sparked the speculation on the Riyadh Pact group meeting, will attend the OPEC gathering.