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To: Snowshoe who wrote (27523)	8/11/1998 1:35:00 PM
From: Mike from La.	Read Replies (2) \| Respond to of 95453

There seems to be a lot of confusion over just how much OPEC has complied with the quotas. Could this be an intentional misinformations campaign? Is someone playing games? What is the most reliable information here? Also, oil prices are bouncing all over the place. Looks like something is about to give. Mike

To: Snowshoe who wrote (27523)	8/11/1998 10:57:00 PM
From: Snowshoe	Respond to of 95453

FOCUS-World oil prices slump to new 10-year low (revised) (Adds closing prices, includes Venezuela announcement) Tuesday August 11, 8:23 pm Eastern Time LONDON, Aug 11 (Reuters) - Oversupplied oil markets sank to new 10-year lows on Tuesday, undermining OPEC's attempts to choke output and ratchet prices higher. Global benchmark Brent crude slumped to a low of $11.55 on the London futures market, below a previous 10-year floor set in March. It later recovered to $11.90 on news of Venezuelan production cutbacks, before sinking back to close at $11.63. Prices had taken temporary heart from Venezuelan Oil Minister Erwin Arrieta who said his country had significantly reduced its oil output as part of an earlier agreement with other oil producers. The announcement that Venezuela has cut 450,000 barrels per day (bpd) of a promised 525,000 bpd put around 20 cents on a barrel of crude. But the gains eventually proved to be short-lived. Oil has lost almost a dollar a barrel in two days as concern grows about the size of a mountainous glut of crude and petroleum products. The real price of the lifeblood of industrial economies has not been as cheap for 25 years, while nominal values are marooned 40 percent below last year's average. The fall has hit the economies of the 11 members of the Organisation of the Petroleum Exporting Countries and other producers despite two rounds of output cuts aimed at shaving world supply by more than three percent. OPEC oil export revenues are already running 30 percent lower than last year and looking set to lose nearly $50 billion from the $148 billion earned in 1997. The slide promises to pressure share prices of major oil companies and delivered a hammer blow to non-OPEC Russia, heavily dependent on commodity prices and struggling to meet debt repayments while seeking foreign investment. Analysts say Russian producers must now cut output, close wells producing at a loss or undertake serious cost-cutting to weather the price crisis. A Gulf oil economist said it was too early to contemplate holding an emergency OPEC meeting to discuss a new round of cuts. He argued that OPEC's so far poor adherence to mandated cuts would improve in August and September and lift prices. But traders said OPEC's indifferent output reductions showed it did not appreciate how long it would take to draw down the crude and product stocks overhanginging the market. ''We really are at a very desperate situation in regards to OPEC,'' said Russell Hill of Austrian oil company OMW. He said it could take four months to bring stocks to more normal levels if OPEC's cutbacks continued at the current unimpressive pace of less than two third of pledges. ''The time horizon issue is important because four months is too far ahead for the market to get excited about,'' said Hill. ''And the compliance factor has diluted the evidence to the marketplace.'' Beleaguered OPEC and non-member producers have pledged three million barrels per day (bpd) of cuts so far in 1998 but stocks are so big that it could take months to drain them appreciably. Bulging stocks at all-time highs now are denting refinery profit margins, prompting refiners to chop throughputs thereby shrinking the market for crude. Crude stocks have been racing higher all year on increases in Iraqi exports, poor Asian demand and a 10 pecent hike in OPEC's production ceiling at the start of the year. Prices in dollars per barrel: Aug 11 Aug 10 (close) (close) IPE September Brent 11.63 11.91 NYMEX September light crude 12.77 13.05