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

To: Lazlo Pierce who wrote (25053)	7/1/1998 12:29:00 PM
From: diana g	Respond to of 95453

FOCUS-Oil prices steady, market waits OPEC oil cuts LONDON, July 1 (Reuters) - World oil prices held steady on Wednesday as traders waited for production cuts agreed last week by OPEC to eat into oversupply. OPEC-members Nigeria, Iran and Oman confirmed their cuts on Wednesday, notifying buyers that exports would be curbed in line with the pact agreed in Vienna. Confirmation of the cuts, effective from July 1, had little impact on oil prices. Bellwether Brent blend crude was trading one cent higher at $13.39 at 12.47 gmt, slipping from a high of $13.47 hit shortly after the market opened. Traders added the market was also keeping a wary eye on events in the Middle East after news of a U.S. missile attack on an Iraqi radar station on Tuesday led to a sharp jump in prices. Prices soon dropped back as speculators took the view the attack was an isolated incident. While Brent has recovered from recent lows, it is still a dollar weaker than when details emerged of OPEC's plans to trim crude production by 1.355 million barrels a day. Iran, OPEC's second largest producer after Saudi Arabia, said it would lower output by 10 percent from Wednesday after agreeing to trim production by 305,000 bpd. Nigeria has ordered multinational firms to cut output by 100,000 bpd, while Oman has cut July crude sales to Japan by 2.4 percent. The market is watching the export curbs carefully as many traders are not convinced all producers will honour the pact. ''In the second half of July we will have a better idea of the cancellations,'' said Christopher Bellew, director of Prudential-Bache International. He added the market would scrutinise OPEC July production figures, due out in early August, to see how many countries were meeting their committments. The latest deal brought total OPEC cuts this year to 2.6 million bpd as producers try and mitigate the six month price depression which has slashed income. Saudi Arabian Oil Minister Ali al-Naimi surprised markets recently by acknowledging some producers were likely to cheat on the deal. ''After what the Saudis said, no-one is expecting 100 percent compliance, but I am cautiously optimistic,'' said Bellew. Analysts have said the OPEC action should secure higher prices by the fourth quarter of the year. Overnight stock figures from the United States, eagerly anticipated by the markets, were neutral and failed to give the market any fresh direction. The data from the American Petroleum Institute showed a sharp drop in gasoline stocks last week, while crude inventories were slightly lower when a revision of the previous week's figures is taken into account. Crude stocks rose by 1.8 million barrels a day, but in reality stocks dropped a little as the institute revised down its figures for the previous week by around two million barrels. ''The figures were slightly constructive and may be better than people were expecting,'' said one trader. On the negative side, crude imports into the United States rose to 10.2 million barrels, the highest level seen in years, said traders. Dealers took a cautious view of the figures, saying they were still waiting to see whether members of the OPEC cartel would abide by the group's pledge to cut output. Massive stocks amassed this year in the United States and Europe are shackling OPEC's hopes that the reduction would lead to a rapid improvement in prices.