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To: Ditchdigger who wrote (3483)	8/29/1998 5:12:00 AM
From: Gator II	Respond to of 5504

DD, Everything I've read indicates Russia is producing flat out at present. Supposedly, Russia's energy infrastructure is such that apparently they can't, near term, deliver to the world market any more crude than they currently are but IF they could, they would, disregarding any voluntary production limits. Even Jimmy Rodgers forcefully made this point Friday morning on CNBC during an interview with Ron Insonia (sp) after Ron suggested that Russia could/would produce more oil to produce much needed foreign exchange. Gator II

To: Ditchdigger who wrote (3483)	8/29/1998 9:24:00 AM
From: Razorbak	Read Replies (1) \| Respond to of 5504

Russian Impact on Crude Prices Kenny: That's a very tough question to answer because so many things can happen in a crisis. First, I believe Russia is already producing at the maximum capacity its infrastructure can presently handle, so I don't think there's much more room for increased exports due to increased production. However, they could start to sell off their strategic petroleum reserves, which aren't presently limited by production bottlenecks, and that could put downward pressure on worldwide crude prices. On the other hand, if they cannot pay the oil field and pipeline workers due to the crash of the ruble, many may walk off their jobs in protest, which could reduce exports and put upward pressure on prices. Of course one of the most common ways to divert attention from a domestic crisis is to create a common enemy outside of one's own borders, like a quick invasion of Azerbaijan, i.e., the Russian equivalent to an Afghanistan/Sudan "Wag the Dog" scenario. That would probably increase oil prices pretty dramatically short term, but I believe the chances of that actually happening are pretty slim. However, if Yeltsin resigns or is ousted during a coup, and a more hardline government takes over, the whole situation would change. At the present time, I don't expect much to happen to crude prices due to the ongoing volatility in Russia, but any of the above scenarios would change the status quo. Hope that helps. Razor

To: Ditchdigger who wrote (3483)	8/30/1998 6:38:00 AM
From: Lawton Hutchison	Read Replies (1) \| Respond to of 5504

D.D. here's my $0.02 on the Russian situation....the Russians are at max production and have been for a long time. They can not produce any more oil in order to flood the market. As their economy implodes, demand may drop freeing-up more oil for export, but this could be more than off-set by production cuts due to infrastructure failures. Yes, Venezuela, Saudi Arabia or Mexico could produce more, but they have seen that overproduction is counter productive, so they have agreed to cuts. Whether or not they adhere to these cuts is another matter. I think they will to a large degree, at least in the short term. The problem comes when demand tries to pick-up; it will be sooooo easy to open the valves a bit. BTW, Russia is no longer the world's leading producer. LOL, Hutch