Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: The Ox who wrote (27338)	8/7/1998 4:32:00 PM
From: Snowshoe	Read Replies (1) \| Respond to of 95453

Oil group sees glut of crude lasting through 1999 By Richard Mably Friday August 7 1:58 PM EDT LONDON (Reuters) - The world's oil glut will get worse before it gets better, with a huge excess of inventories set to spill over well into next year, a group of industrial oil-consuming countries said Friday. Publishing its first projections for 1999, the group, the International Energy Agency, said it was expecting a modest recovery in demand for oil worldwide. But it warned that another downturn in Asia's troubled economies could mean more pain for oil producers already struggling with the lowest prices in 10 years. "It is difficult to foresee the excess stock overhang problem resolved until well into 1999 at the earliest," the IEA said in its monthly Oil Market Report. "So 1999 is likely to inherit an oil market heavily burdened with excess stocks, an unresolved Asian financial crisis (and) a delicate production agreement among OPEC and a few non-OPEC producers." "If stocks stay high then that's certainly not going to be bullish for oil prices," added the IEA's Roberto Sieber. Benchmark Brent blend crude traded at just $12.80 a barrel on Friday, a third lower than average prices last year. The IEA said its initial 1999 projection was for demand growth of 1.6 million barrels a day to 76.3 million barrels daily from 74.7 million in 1998. Asian oil demand is set in 1998 to post an unprecedented downturn and growth in demand in Russia is expected by be "severely dented." The IEA sees Asian consumption rising next year to 20.25 million barrels daily from 19.77 million this year and 19.83 million in 1997. But it warned that a second dip in the Asian economies and weakening demand elsewhere would mean another round of oil producers' supply cuts. "The 'Asian contagion' scenario did not come true in 1998 but it remains a real threat to non-Asian developing countries, their trade with the OECD and world oil demand," the agency said. The picture is not one to please oil producers still struggling to reverse a build in oil stocks that set yet another record in June. The IEA said supplies were still exceeding demand despite the two rounds of output cuts engineered since March by OPEC and other producing nations. Commercial stocks held in the industrialised nations of the OECD hit 2.79 billion barrels at the end of June. That was 209 million more than a year earlier and 291 million higher than end-June 1996. Space for heating oil and diesel inventories ahead of the northern hemisphere winter was already "increasingly scarce," the IEA said. OPEC's best efforts so far have proved too puny to reverse the stockbuild. The Organisation of the Petroleum Exporting Countries led a reduction of world supplies in July of some 500,000 bpd to 75.16 million. But, said the IEA, even assuming further supply cuts the world's hoard of oil is likely to grow even further in July and August.

To: The Ox who wrote (27338)	8/7/1998 4:33:00 PM
From: Broken_Clock	Respond to of 95453

the lack of follow thru this afternoon could be due to the overall narket backing off. as for the osx rebound yesterday and today: how many shorts were covering at these prices? i suspect a bunch were. considering the "days to cover" on the entire sector, we could have a 5 day rally and not have any "meaningful" buying...just short covering. It will take a two week interuption in oil deliveries to get rid of the current glut. unless actual war breaks out in the mid east i don't see any interuption happening other than the feeble cuts slowly working their way into the market>

To: The Ox who wrote (27338)	8/7/1998 5:08:00 PM
From: SliderOnTheBlack	Read Replies (4) \| Respond to of 95453

Michael Happel...catalyst for today's rise. The International news wires in foreign trading (see Yahoo SLB news) were quoting the sector's rise being related to the bombings; however I think what we've seen is a 2 day lag as Brokerage Houses, fund managers and traders have had 1-2 morning meetings/ time to think - post Acampora; and formulated & promoted strategies toward diversifying to undervalued sectors. The Russell Index moved well; small caps and value stocks dominated the conversation on all financial mediums today and yesterday. This has not been the case lately. We saw sector rotation - this was 50% of the driver, short covering 30%, the bombings 20% and crude oil - 0 %...all most forgot those damn shorts ! A good day. Where are the true remaining bargains ? - DO, NE, RIG really didn't move as well as the GOM Jackup oriented drillers like FLC - with big GOM exposure, MDCO, ESV, RDC & my rabbitt CDG. Go figure - you would think it would be deep-deep-deep; with RIG, SCSWF, CXIPY, CDIS et al.-- big caps will break out first, but keep an eye on small cap niche players here - I love OMNI, SCSWF, CXIPY & CLB - in that order. RIG is a phenomenal buy still today (or monday) as it didn't really explode ? Next week will really be interesting... Will this weekends YEN revelations put a brake on this - fundamentally it should temper things to a big degree. The reality of facts are not good No new positive news on the crude oil front, YEN & Chinas potential devaluation cloud is ominous and should be heeded by all sectors - especially the big cap S&P's - I actually would have said we would have had a 5-6% sell off today if I only had this factual news in which to base an opinion....quite unbelieveble - a 2 day display of irrational exuberance in the patch ? I hope not, I'm obviously long, and I LOVE this sector over 1-3-5 years! But - there is no reason for this to have happened... but you gotta take it when you can get it sometimes. Had a nice 1 day play in OMNI, but puked on my weenie GLM short - did it so I could say that I did it... small short trade, waited for a decline off the open got in at 13 15/16 and after watching it bounce but with no real downside trend ''play'' off of the TSC GLM story - I covered for a few pennies loss; Shorting is not fun; gotta be glued to the damn screen - I'll leave it for the guys in the black hats - I have sinned today (shorting the patch -well it ''was'' GLM afterall) I shall not again. Anyone following OMNI and have you picked up on the STRONG accumulation on every single selloff since the first of the year - like clock work ? Solid, rising star in the patch. Earnings upgrade for 1999 and super International expansion move into South America with a seismic service acquisition. Strong analyst BUY ratings. These guys are for real - had the International expansion plans from the get go in their first annual report. gotta go; Maria B gonna talk up the 'patch right now on CNBC ...don't you wish we all had instinet/24 hour electronic trading !