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

To: SJS who wrote (26811)	7/31/1998 1:48:00 PM
From: Richard D	Read Replies (1) \| Respond to of 95453

If the U.S. Govt.pulls out 28 million barrels from present inventories, that would equal close to the year over year excess in U.S. inventories. If we go forward with near normal inventories and normal usage (or possibly increased usage secondary to growth and La Nina) and increasing OPEC cutbacks, oil is bound to go up before year end. We still have to work through oil in transit, but this large purchase of oil may jump-start the gradual cutbacks of OPEC, IMHO. Japan's usage is neither here nor there, since they could improve with stimulative economic measures or decrease with outright depression. It seems unlikely the U.S. or Japan will let the latter scenario play out, though _ _it happens. It's the perception of oil's direction that will steer us, and this perception has kept oil futures above 14 despite enormous inventories sans U.S. Govt. purchase. Richard