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

To: Dragon 1 who wrote (30923)	10/20/1998 8:38:00 AM
From: Captain James T. Kirk	Read Replies (1) \| Respond to of 95453

Tuesday October 20, 6:58 am Eastern Time FOCUS-Oil greets winter with another price slide LONDON, Oct 20 (Reuters) - World oil prices were back in the bargain basement on Tuesday after a heavy price slump on Monday which caught dealers unaware with its severity. London December futures for benchmark British Brent blend were valued at $12.49 a barrel in early trade, up ten cents, following a 74 cent slide on Monday. Brent is now just a dollar above mid-August's 10-year low, having foiled the efforts of the major producing countries who this year have sliced exports to raise prices. ''It must be very disappointing for producers to see the opening of the winter consuming season greeted by such a firm thumbs down from the market,'' said Peter Gignoux at Salomon Smith Barney. ''The depth of Monday's sell-off caught most people by surprise.'' Bulging world oil inventories have eased from their summer peak but still remain well above year-ago levels. Nevertheless, oil's September recovery, which took Brent to $14.90 a month ago, had been expected to hold prices at steady or slightly higher levels into the northern hemisphere winter months. Instead, said dealers, the investors who might have been attracted to buy oil futures in the approach to winter will view the latest price slump as a danger sign. ''Seasonality is thrown out of the window,'' said Gignoux. For oil companies whose shares had welcomed the improved market in September the latest price retreat means bad news. Europe's two biggest companies Royal Dutch/Shell and British Petroleum were downgraded on Monday by stockbrokers Dresdner Kleinwort Benson. For besieged oil producers, who have already twice this year executed export reductions, it appears to be a case of back to the drawing board. But analysts said the policy rifts which the exporters were able to overcome earlier in the year to agree some three million barrels a day of output cuts were beginning to reemerge. While some Gulf oil nations like Kuwait are keen to embark on further supply reductions, key exporters like Saudi Arabia and its Latin American rivals in the U.S. market, Venezuela and Mexico, are not prepared to take further action. ''Clearly, the adverse effects of low oil prices are taking their toll on oil exporters, and domestic political consideration could start to take precedence over OPEC commitments,'' said Washington's Petrofinance in a report. Oil prices remain low despite OPEC's good record of compliance with the 2.6 million barrels a day of output cuts its members have pledged. Producers are expected to compare notes on the market in a week's time on the sidelines of an international energy conference in Cape Town, South Africa. OPEC's main producers and non-OPEC suppliers Mexico and Norway will be represented at ministerial level in Cape Town. ''I can't imagine the Saudis doing any more in the way of cuts without the Venezuelans and the Mexicans on board,'' said a senior oil trader in London. ''And they've made clear they're not interested.'' Prices in dollars per barrel: Oct 20 Oct 19 1040 GMT (close) IPE December Brent $12.49 $12.39 NYMEX November light crude $13.40 $13.35 --------------------------------------------------------------------------------