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

To: MonsieurGonzo who wrote (22737)	5/22/1998 8:26:00 PM
From: Captain James T. Kirk	Respond to of 95453

FOCUS-Oil market up but fragile, traders eye OPEC LONDON, May 22 (Reuters) - World oil prices edged higher on Friday but market sentiment remained weak and plentiful supply is likely to keep a lid on any further gains, oil traders said. Brent crude futures were up four cents at $14.02 a barrel at 1253 GMT but the recent trend has been downward with prices falling a dollar over the past couple of weeks. Oil prices have stabilised either side of $14 in recent weeks after the March Riyadh agreement at which oil producers agreed to cut two percent from global supply. But that is more than $5 below the average price last year and some traders are sceptical that the Organisation of the Petroleum Exporting Countries (OPEC) will be able to deliver another round of production cuts at its meeting in Vienna on June 24. Having publicly flirted with the possibility of fresh reductions, OPEC ministers risk undermining prices if they now fail to deliver, analysts say. Earlier this year revenues among oil producers were hit so hard that OPEC and non-OPEC countries hammered out a pact to remove some 1.5 million barrels per day (bpd) of supply from world markets. The pact boosted prices to nearly $16 in March but since then levels have fallen back. Oil traders say the market is still oversupplied and analysts believe OPEC has fallen short of its promise to cut 1.25 mln bpd as part of the pact. The Centres for Global Energy Studies, a London based think-tank, said OPEC cuts have ''fallen around 0.4 mln bpd short of the target.'' Rising Iraqi supplies and signs that Baghdad's oil exports may continue unabated into the summer have also undermined confidence as traders struggle to find storage space in brimming tanks. Iraqi oil exports,, under an oil-for-food deal with the United Nations, have been delayed twice before because of hold-ups in renewing the six-monthly deal. But in recent days differences between Baghdad and the U.N. have narrowed about how to distribute proceeds from the fourth round of the deal due to start in early June, U.N. sources said Approval by U.N. Secretary-General Kofi Annan of the distribution plan would trigger the fourth round, which calls for more than doubling the oil sales limit to $5.256 billion from $2 billion every six months. Despite the big jump, Iraq is probably only capable of raising its exports by 200,000 bpd or 300,000 bpd from its recent level of about 1.4 mln bpd. At current world oil prices, Iraq would only raise about $2.9 billion over a six-month period, assuming it was exporting at 1.6 million bpd. There have been few signs of support in recent weeks for the battered oil market. But earlier this week Russia raised the possibility of further cooperation between OPEC and non-OPEC members by saying it would attend the Vienna meeting. In addition some oil traders have cited good demand for gasoline from the United States as supportive. Prices in dollars per barrel: May 22 May 21 (1330 gmt)close) IPE July Brent 14.02 13.98 NYMEX July light crude 14.72 14.63 --------------------------------------------------------------------------------