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To: Redman who wrote (25269)	7/7/1998 6:11:00 PM
From: Redman	Respond to of 95453

Well, here is something more bullish to add to my last statement. They do not think Iraq can sustain the 2.4 million output. Tuesday July 7, 5:32 pm Eastern Time FOCUS - Iraq oil exports surge but may slow later By Bernie Woodall NEW YORK, July 7 (Reuters) - The United Nations reported that Iraq's crude exports surged to average 2.4 million barrels per day (bpd) in recent weeks, though U.N. officials added that it is too early to tell if that level will be maintained in the months ahead. Meanwhile, Iraq's Ambassador to the United Nations, Nizar Hamdoon, said he expects Iraq's sustainable export level to remain at 1.6-to-1.7 million barrels per day (bpd), the level assessed by U.N. experts earlier this year. According to reports by the U.N.'s oil overseers, Iraq exported a total of 31.2 million barrels of crude in the 13 days to July 2, or an average of 2.4 million bpd over the period. That was up from just below 650,000 bpd in the previous three weeks when Iraq was starting up the fourth phase of the ''oil-for-food'' program and from an average just above 1.6 million bpd in May. Hamdoon said the rise has to do with scheduling of ships and other logistical details and he expects the average to fall. The export level is ''1.7 million (bpd) and we are able to sustain it,'' Hamdoon said. ''It may go down to 1.6 million (bpd) depending on logistics. The arrival of tankers is one of the factors.'' However, according to information from shipping sources obtained by Reuters earlier this week, Iraq has scheduled exports for July averaging 1.89 million bpd. The U.N. on Tuesday also said that 39 oil contracts have been approved so far in the fourth round of the program, which ends Nov. 25. The contracts represent 253.3 million barrels , which is an average of a bout 1.4 million bpd for the remaining period of the fourth round. There are currently another three contracts pending and more may be forthcoming. The U.N. Security Council three week ago passed a resolution to allow Iraq to import $300 million of spare parts for essential repairs to its oil infrastructure in order to boost oil production and exports. It will be months before the impact of these renovations are felt in oil production levels, said a member of a U.N. committee that must approve contracts for the repairs. Also, much of the repairs are to maintain Iraq's export level rather than to increase it. Under the terms of the fourth round of the program Iraq can export up to $5.256 billion of oil, which is more than three million bpd at current prices.

To: Redman who wrote (25269)	7/7/1998 6:51:00 PM
From: John Carson	Respond to of 95453

I wonder how all those oil sheiks feel right now. They just had a big OPEC meeting, gave it their best shot and made some cuts and all they have to show for it is declining oil prices. Their entire economy revolves around oil, could it be they miscalculated the extent of cuts needed? If they did miscalculate, is it not in their best interest to convene again and make more cuts. Right now they cannot win (either can we) since they made what they thought were sufficient cuts only to have the price of oil continue to decline. They are now producing less oil and getting paid less for it. How long are they going to put up with that scenario? I hope this less than expected surplus is the beginning of a market turnaround. John Carson