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

To: SliderOnTheBlack who wrote (25408)	7/9/1998 4:32:00 PM
From: Bucky Katt	Respond to of 95453

Oil price drop means earnings misery for US majors NEW YORK, July 9 (Reuters) - The nation's biggest oil companies will report a sharp slide in second quarter earnings after a 26 percent drop in oil prices from last year's $20 per barrel level, and analysts say a long-awaited recovery may be slow in coming. ''The decline is driven by the tremendous weakness in world oil prices for which we see no immediate relief. Eighteen dollar oil is a pipe dream,'' said Michael Young, analyst at Deutsche Bank Securities. He forecasts second quarter earnings will plunge 25 percent from a year ago and seven percent from the first quarter, hammered by an average spot West Texas Intermediate price of just $14.83 per barrel and a small rise in natural gas prices. Young, who is at the bearish end of oil forecasters, is looking for an average 1998 WTI price of $15 per barrel as he believes that production cuts agreed by the Organization of the Petroleum Exporting Countries and other producers will take some time to eat into huge oversupply and huge inventories. As crude oil prices fall so do costs of refinery feedstocks. As product prices have not fallen as rapidly as crude prices, refinery margins are seen to be strong, with some regions showing more strength than others.

To: SliderOnTheBlack who wrote (25408)	7/9/1998 8:28:00 PM
From: PuddleGlum	Read Replies (2) \| Respond to of 95453

Slider- One related note to what I posted earlier on XTO... An e&p company (which shall go nameless) has scaled back its drilling plans recently and is instead acquiring producing properties because they're selling for a song and music is much cheaper than drill bits. Yes, there is a dark side to the XTO story, and that is that the e&p companies may present a better value than the drillers ... for now, at least. No!! No!! Please don't banish me from the thread for that statement! pg