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

To: Snowshoe who wrote (28264)	8/25/1998 2:05:00 AM
From: Snowshoe	Read Replies (1) \| Respond to of 95453

NOESIS Update: oil-gasoline.com Aug 24, 1998 Crude Oil NOTICE: There is still no change in the NOESIS forecast. Crude oil inventories world wide remain high although there may be a light at the end of the tunnel (depending on who you are) as Baker Hughes rig count continues to drop. World rig count was down by another 59 rigs in July. Interestingly, E&P activity dropped in every corner of the world except the mideast, which added 7 rigs. The reason the price of oil will remain on the down trend is primarily because the U.S. is still not in a demand mode. Inventories of crude oil are high. More importantly, inventories of distillate are so high that refineries will not be able to continue to operate at high levels into the fall unless there is a very early, very cold winter. Thus, demand for crude oil will decrease. In the meantime, it is entirely possible that the U.S. could experience a gasoline shortage from refineries in the Oct-Dec time frame because high distillate inventories will make it difficult for refiners to continue to make gasoline. Initially, refiners will purchase gasoline. When the spot price of gasoline reaches a level that justifies upgrading distillate to gasoline, they will begin to reprocess distillate, which will allow increased production of gasoline while holding crude oil inputs down.