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

To: J. Fred Donham who wrote (30577)	10/10/1998 8:42:00 AM
From: Gameboy	Read Replies (2) \| Respond to of 95453

Re-reading the table - 4th qtr draw of 3.9 mb/d? Taking a look at the EIA's International Petroleum Supply & Demand table (October 1998) eia.doe.gov we see that 2nd qtr total world supply was 75.0 mb/d and demand was 72.2 mb/d, which contributed to our present 'glut' (a build of 2.8 mb/d) which was even worse than the 1st qtr build of 1.1 mb/d. But look at the 3rd qtr - total world supply drops to 74.0 mb/d and demand increases to 73.5 mb/d; this includes the reduction in OPEC supply from 30.6 mb/d to 29.4 mb/d. This 1.2 mb/d is the figure published on July 10th by Petroleum Intelligence Weekly to indicate the OPEC reduction as of June, 1998. But OPEC has reduced production by 3 mb/d 3rd qtr (98% compliance according to IEA) and this is a 2nd qtr figure. OPEC supply is overstated by 1.8 mb/d. for the 3rd qtr. This means that 3rd qtr instead of a build of .5 mb/d (as indicated by the table) there is a draw of 1.3 mb/d. But that's not all. As we in the oil service sector can attest, a lot of non-OPEC countries chipped in by lowering production including the US. By giving a rough estimate of another 1 mb/d of even less supply, the 3rd qtr draw comes to 2.3 mb/d. Allowing for Iraq's increased production under 'oil for food' the draw by the end of the 3rd qtr comes to about 1.9 mb/d. Now look at the 4th qtr. The table shows total world supply of 75.0 mb/d and the total world demand of 76.5 mb/d and this includes the OPEC supply figure of 29.8 mb/d I'm guessing this increased supply (.4 mb/d higher than 3rd qtr) reflects Iraq's increased production. Adjusting the data to reflect the reduced OPEC supply due to quota compliance and diminished non-OPEC supply due to low crude prices, yields a net draw of 3.9 mb/d (instead of a net draw of 1.5 mb/d as indicated in the table), and if the EIA supply figure already allowed .4 mb/d for increased Iraqi production, we'd have to increase the net draw by another .4 mb/d. This re-reading the table assumes that the EIA figures never re-adjusted for the 3rd qtr OPEC cutback compliance or for the non-OPEC production cutbacks due to low crude prices, but it appears to me that's just what they did - simply ignored it. With a draw of 3.9 mb/d the neverending oil glut might end and the US might kick into high gear and start producing as much oil as possible so that we don't export most of our petroleum dollars. Best of luck, Steve