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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (12903)	10/21/1998 11:25:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

OIL AND NATURAL GAS PRICING SCENE - PART 1 WEDNESDAY AM 10/21/98 Venezuela says output cuts extension not official CARACAS, Oct 20 - Venezuela's Energy and Mines Vice Minister Dolores de Torres said Tuesday that Venezuela had made no official agreement to extend oil outputs cuts beyond June 1999, but did not rule out that such a decision could be taken in the future. The issue is largely moot because this government leaves office in February 1999 and any future decision would be taken by different officials. Asked if there was a proposal to extend the oil cuts, which have taken about four percent off world oil output, she said: "Officially no ... there is nothing official, nothing in writing." "If it is not decided...at the OPEC meeting or next year based on market studies to extend (the output cuts) then on the first of July little by little production will be reincorporated," de Torres added. At a meeting in Cancun, Mexico earlier this month oil ministers from Venezuela, Mexico and Saudi Arabia said the output cuts might be extended by six months to the end of 1999, depending on oil market conditions. While some Gulf oil producers have argued for extending the current agreement and even making further cuts, producers in the Americas such as Mexico and Venezuela have been reluctant to commit to an extension of the cuts. IEA's Priddle says oil cuts not effective long term LONDON, Oct 20 - The head of the International Energy Agency (IEA), the West's energy watchdog, said on Tuesday that he did not think cuts in oil production by OPEC members would be effective long term though he conceeded that recent curbs had helped to support prices. "I do not think it is effective in the long term," Robert Priddle told reporters in London when asked if he thought another output cut by OPEC was on the cards when producers and consumers meet in Cape Town later this month. Priddle, whose organisation is a strong proponent of free market forces, said that the Organisation of the Petroleum Countries succeeded in preventing a further slump in the price of oil by cutting 2.6 million barrels per day from the market to lift prices from a 10-year low. But he said while the short-term objective had been reached, the risk of such "collusive action" by the cartel was loss of market share by driving oil companies away to countries where there were no restrictions to production. Priddle, who had earlier presented the IEA's energy report on Britain, told a news conference that low oil prices were good for net importers in Asia but bad for industrialised nations trying to reduce emissions of greenhouse gases. "On the positive side, the world financial crisis for net importers in Asia would have been much worse...but the energy import costs of these countries has risen by only five percent despite develuations in their currencies," Priddle said. But he added that low oil prices were bad news on environmental grounds because they made it difficult "to convince consumers to use energy more efficiently", particularly in the transport sector. Crude build in API as weather improves NEW YORK, Oct 20 - Oil traders and analysts said on Tuesday they expected another buildup in U.S. crude stocks for the week ending Oct. 16, citing rising imports and normal offloading tanker operations at the Louisiana Offshore Oil Port (LOOP). But that projected build may not be factoring in refineries coming out of turnaround. Ahead of the weekly inventory report from the American Petroleum Institute (API), they also said the pace of refinery runs would pick up. But runs would still be relatively low, compared with the near or at full capacity level before a series of storms in September forced some refinery shutdowns, they noted. Since the end of August until the week ended Oct. 9, the API statistics show a straight decline in refinery runs totaling 2.2 million barrels per day, from about 15.7 million bpd to 13.5 million bpd nationwide. An upturn in utilization, however, would be consistent with information coming from oil companies about refineries coming out of maintenance or turnaround. In a Reuters poll, the traders and analysts also said that distillates, which include heating and diesel oil, and gasoline, will show small stockbuilds. But with demand not easy to ascertain, poll participants were divided on gasoline: half saw a slim stockdraw, and half expected an increase, with higher figures. As for distillates, most of the forecasters saw a seasonal stockbuild. The forecasters said they expected a build of 4.125 million barrels in crude stocks, 800,000 barrels in distillates and 1.875 million barrels in gasoline. "Refinery runs are relatively low, while imports are strong and production has returned to normal in the Gulf of Mexico, now that weather has improved," said Jason Chartrand, an analyst at Atlanta-based GSC Energy. Tom Bentz, an analyst at Cresvale International, agreed, adding that cargoes are being offloaded at the LOOP, which again had a full week of normal operations. Jim Ritterbusch, a trader at Chicago-based Sweeney Oil, said he expected crude imports were high -- at up to 9.0 million barrels per day. On gasoline, the participants saw an overall build of 1.875 million barrels. But they conditioned the prediction on how demand turned out. "If the demand is low, say, 8.0 million barrels or lower, then there could be a build, while if demand were up 8.5 million barrels or more, there could be a draw, said Cresvale's Bentz. Last week, the "implied demand" on gasoline was 8.9 million barrels based on the API data, which showed an unexpected large gasoline draw of 7.0 million barrels. "The large draw should correct and I expect a smaller draw of just about 1.0 million barrels in gasoline," said a NYMEX trader, who added: "That should not be a surprise at all." On distillates, the poll participants said they saw the build as seasonal. The forecasters were unanimously bullish about refinery runs, saying they expected processing to be up 1.85 percentage points from the previous week's rate of 87.5 percent. Last week's rate was a drop of 0.5 percentage point. One trader said improving margins are encouraging refiners to continue with the relatively high runs. Analysts: API data positive surprise, but confusing New York-Oct. 20 -Weekly American Petroleum Institute (API) inventory data, released today, were termed a positive development for the crude oil and heating oil markets, but a bit disappointing for the gas futures. However, traders noted some of the data were a bit confusing and they hope the Department of Energy (DOE) data early Wednesday clear up some of the discrepancies. "Any given week, the numbers can be questionable," one analyst commented. The API reported crude oil stocks were down 290,000 barrels to 327.863 million barrels. Most were looking for a build of 3 million to 6 million barrels in this week's report. One reason for the smaller build was an upward revision in last week's total stocks of nearly 800,000 barrels, pushing last week's stocks up over 9.0 million barrels to 328.2 million barrels. Total stockpile of crude oil compared to year-ago levels rose to a surplus of 26.85 million barrels, up from 23.5 million barrels last week. Traders said some of the bullish implications of the draw on crude oil supplies were offset by a build of 2.6 million barrels of crude oil in PADD 3 inventories. Crude oil imports rose 42,000 barrels this past week to 8.234 million barrels per day. Most were looking for imports to reach up toward 8.8 million to 9.0 million barrels. But the real surprise was that refinery operations fell 0.7% to operate at just 86.8% this past week, after dropping by a whopping 8.0% the prior two weeks. Most were looking for a 1% to 2% rise in operations, because of operations coming back on line following Hurricane Georges. Gasoline stocks rose 384,000 barrels when most were expecting a draw of 1 million to 2 million barrels this past week. The small rise in gasoline stocks pushed the surplus up to 1.6 million barrels compared to a year ago, but still down from a surplus of more than 17.8 million barrels four weeks ago. Total gasoline stocks on hand now total just over 199.3 million barrels. Implied demand for gasoline fell by about 400,000 barrels to 8.5 million barrels per day and that could leave the gasoline market vulnerable to some selling pressure, one analyst said. He said the build in RFG stocks was also negative for the futures. He said the problem is what will happen to the gasoline market when refinery times are increased, when refiners were able to extract more gasoline from less crude process this week. Distillate stocks also fell by a larger-than-expected 2.37 million barrels to 147.1 million barrels. Overall stocks of distillates are now some 11.0 million barrels larger than a year ago, but still down sharply from the 24.0 million barrels of surplus stocks versus year-ago levels in the middle of August. Traders said the drop in distillates came from heating oil, as diesel fuel stocks were slightly higher. This afternoon on NYMEX ACCESS trading, December crude oil futures are up 9 cents at $13.61 after falling 1 cent earlier today. December heating oil futures are up 25 points at 39.10 cents. December unleaded gasoline futures are up 11 points at 42.80 cents. Tech Trends: Martens sees push below June lows in crude oil Tue, 20 Oct 1998 16:03 EST (Editors note: This is one in a series of FWN Technical Trends, in which top traders and technical analysts provide FWN with their latest insights on markets.) Chicago-Oct. 20-FWN--Crude oil furures may have completed a three wave rally earlier this month, which points to a run toward the June lows seen on the weekly chart, said Jim Martens, senior commodity specialist at Elliott Wave International. Looking at the weekly crude oil chart, futures rallied from the mid-June low at $11.42 in a "nice five wave movement to the July high at $15.00," Martens noted. That would represent "wave a." Activity from there looked like a "pullback in three waves to the mid-August low at $12.56," he added, representing "wave b". From there, the market "rallied in another five wave sequence to the Oct. 2 high at $16.36," representing "wave c". Using Elliott Wave analysis, Martens says the overall action was a "three wave rally, which Elliott tells us is corrective." From the early October high, "we've already seen the market drop over $3. The trend should remain downward." Elliott Wave analysis utilize repeating wave patterns and the Fibonnaci number sequence in order to gauge market trends and targets. Ideally, Elliott patterns reveal a five wave advance with a subsequent three wave decline. Pointing to the three wave rally formation, Martens noted in the development, "the two legs that move upward are approximately equal, which is something else that tells us that it is corrective." On the recent sell off from the $16.30 area, Martens speculated "we are probably finishing the first wave of a new sequence to a new low beneath $11.42." "Once the decline goes beneath $11.42, it appears that a five wave decline sequence beginning in December, 1996 will be coming to an end," he said. On the downside, "the next support of any significance is from April, 1986 at $9.75. I wouldn't be surprised to see that lower level tested." "We can be confidently bearish now, but I think we are approaching what may be a major low," he added. Looking at the long-term charts, crude oil hit its lowest levels earlier this summer since April, 1986. From 1986 on, crude prices have slipped below $13 per barrel only one time until this summer. In today's activity, December crude futures have slipped within nearly a quarter of the $13.00 floor. Venezuelan oil cut targets $18-19 Brent - Minister CARACAS, Oct 20 - Venezuela's Energy and Mines Minister Erwin Arrieta said on Tuesday he was targeting a price for Brent Blend crude oil of $18 to 19 per barrel, but rejected the idea of further cuts in oil production to get there. He said new alliances were being forged in the world oil industry between companies with large markets and countries with big reserves, hoping to stimulate new markets and make room for all producers. "Remember that the dream of the Organization for Petroleum Exporting Countries used to be $21 per barrel, but from now on, we are thinking about a price for Brent of $18 to $19 per barrel," he said, without specifying a time limit. He was speaking to reporters on the fringes of an oil conference here. Other OPEC members, such as Kuwait, have suggested making more production cuts if Brent fails to rise to $17 per barrel by the OPEC meeting on Nov. 25. In London, on the International Petroleum Exchange, the December Brent futures contract last traded down three cents at $12.36 a barrel on Tuesday. "To get there, we have to do many things without poisoning ourselves with new cuts," Arrieta said, adding: "Supposing the market required (more cuts), we would meet and analyze that, but at the moment there has not been any such proposal." Venezuela, working with fellow OPEC member Saudi Arabia and non-OPEC producer Mexico, helped spearhead agreements this year to cut global oil production by about 4 percent in an effort to boost sagging prices. Arrieta said there had been a shift in strategy away from production cuts toward forming alliances with international companies to seek new markets. "I can't let the cat out of the bag, but there are surprises for everybody in store, where different companies and different countries would enter into alliances, not mergers, but looking to increase space in the market so there is room for everybody," he said. Venezuela's state oil company President Luis Giusti said in a recent interview that he could imagine Petroleos de Venezuela SA (PDVSA) forging an alliance with a multinational on the scale of the merger of British Petroleum Co. Plc <BP.N> and U.S.-based Amoco Corp. <AN.N>. PDVSA has already signed a number of downstream alliances, usually involving crude oil supply, refining and products marketing, such as those with Amerada Hess Corp. <AHC.N> and Phillips Petroleum Co. <P.N>.

To: Kerm Yerman who wrote (12903)	10/21/1998 11:30:00 AM
From: Kerm Yerman	Respond to of 15196

OIL AND NATURAL GAS PRICING SCENE - PART 2 WEDNESDAY AM 10/21/98 10/20 15:58 FOCUS-Oil greets winter with another price slide LONDON, Oct 20 - World oil prices were back in the bargain basement on Tuesday after a severe slump on Monday which caught dealers by surprise. London December futures for benchmark British Brent blend crude oil last traded down three cents at $12.36 a barrel at the close on London's International Petroleum EXchange. Brent is now within a dollar of mid-August's 10-year low, in a market which has foiled the efforts of the major producing countries who this year 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 which welcomed the improved market in September the latest price retreat means bad news. Shares in Europe's two biggest oil companies, Royal Dutch/Shell <RD.AS> <SHEL.L> and British Petroleum <BP.L>, 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. "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." 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. 10/20 16:35 NYMEX Nov exits on plus side, Dec ends off a penny NEW YORK, Oct 20 - A combination of short covering on the outgoing November crude and buying of the incoming December crude pushed NYMEX oil prices higher at the close on Tuesday, traders said. November crude, which expired at the end of the session, settled at $13.43 a barrel, gaining eight cents as it surged to positive territory about half an hour before the close. The front month recovered from $13.07, a fresh contract low that it fell to following forecasts of another build in crude stocks, ahead of the American Petroleum Institute's weekly inventory report due out later Tuesday afternoon. December crude ended at $13.52, down a penny but recovering from a $13.28 contract low that it hit in the afternoon. The contract traded as high as $13.70 in the flurry of buying near the close. "There was some late unwinding of the November crude, but mostly crude activity focused on the December contract. It's hard to tell if the closing reflects the API forecast of a build, but overall, the market remains bearish," said a NYMEX floor trader. November gasoline wiped out the day's losses and settled at 42.95 cents a gallon, up 0.87 cent. The contract traded as high as 43.05 cents. In the early going, the contract dipped to a session low of 41.75 cents. November heating oil was marginally higher, ending at 37.75 cents a gallon, up 0.03 cent. The contract traded between 37.15/37.90 cents and moved along with crude. In London, December Brent retraced most of its losses, ending narrowly lower, drawing support from late short covering in New York, traders said. The contract finished at $12.36, down three cents from Monday. Ahead of the weekly API report, traders and analysts forecast a build of 4.125 million barrels in crude stocks for the week ended Oct. 16. In a poll by Reuters, the forecasters said they based their prediction on rising imports and improved weather in the U.S. Gulf, allowing normal tanker offloadings at the Louisiana Offshore Oil Port. But the build projection appeared not to include refineries coming out of turnaround. The poll participants also predicted a small build of 800,000 barrels in distillates and 1.875 million barrels in gasoline. But forecasters noted that in gasoline, the build could easily turn into a small draw if demand increased to about 8.5 million barrels per day or higher. They said demand at this point was not seasonally high although in the week ended Oct. 2, there was a surprise stockdraw of more than 7.0 million barrels implying a demand of 8.9 million barrels. 10/20 16:41 U.S. cash crudes trim gains, but still close up NEW YORK, Oct 20 - U.S. cash crude differentials trimmed their gains toward the close of trade Tuesday, though prices were still pulled higher by a strong finish to the futures contract on the New York Mercantile Exchange (NYMEX). U.S. cash crude traders said that differentials for several grades, including West Texas Sour/Midland, climbed by as much as 15 cents a barrel thanks to a run of short covering early Tuesday afternoon. But cash crudes subsequently handed back a bit of those gains, and most grades finished only slightly stronger than where they began the day. Light Louisiana Sweet/St. James was one of the most volatile grades Tuesday, trading anywhere from 30 to 37 cents below West Texas Intermediate/Cushing, the cash crude benchmark. LLS/St. James closed at between 35 and 30 cents below the benchmark, several cents below Monday's value, traders said. But its sister grade, Heavy Louisiana Sweet/Empire, appeared to rise in value. HLS/Empire was done as strong as 58 cents under WTI/Cushing. Also stronger were West Texas Sour/Midland, West Texas Intermediate/Midland and WTI/Cushing postings plus. WTS was done on Tuesday as strong as $1.44 under WTI/Cushing, but ended at $1.55 to $1.50 under WTI/Cushing. Meanwhile, outright values for cash crudes were pulled higher by stronger front-month futures on the NYMEX. The November contract, which expired at the end of Tuesday's session, settled up eight cents at $13.43 a barrel. The December contract settled a cent lower at $13.52, cutting the spread between months to less than 10 cents. November WTI/Cushing will be used as a guide to cash crude prices through the week, with adjustments based on the movement of the December futures contract. The narrow spread between months propped up postings-plus, which closed at $2.35 from $2.32 a barrel midday. Eugene Island crude was done at minus $1.13 to the benchmark. Many cash crude traders were also trading December barrels. LLS was said done at 22 cents under the December benchmark. WTS was reported done $1.53 under WTI/Cushing using December NYMEX as a jumping-off point. Meanwhile, the American Petroleum Institute's (API) stock report will be released late Tuesday, and should help set the tone for the remainder of the week. A Reuters survey of oil analysts taken Tuesday morning showed that they expect the report to show a crude oil build of 4.2 million barrels, which could put additional pressure on prices. Last week, the API reported that crude oil stocks rose 8.2 million barrels, which caused an immediate dip in the domestic and international oil markets. 10/20 22:25 U.S. West Coast crude discounts flat in slow trade LOS ANGELES, Oct 20 - U.S. West Coast spot crude oil differentials were flat Tuesday with trade slow to resume after an industry golf event. With differentials unchanged, outright prices rose in line with slight gains for NYMEX oil futures. The last deal for Alaska North Slope (ANS), the primary grade on the West Coast, was done Oct. 9 at a discount of $1.025 a barrel to the benchmark U.S. crude, West Texas Intermediate (WTI). The notional price for West Coast ANS at the same discount climbed to $12.34/51 a barrel from $12.28/45. No fresh trades were reported. Several major oil firms cut their posted prices for West Coast crudes by 50 cents to 75 cents a barrel Monday, bringing their prices in line with a 80-cent slide in oil futures that day. NYMEX natural gas ends higher with firm cash, weather NEW YORK, Oct 20 - NYMEX Hub natural gas futures ended higher Tuesday in a fairly active session, with a sharp jump in cash amid much cooler weather forecasts this week driving the spot-November contract through key resistance, sources said. November climbed 5.9 cents to close at $2.202 per million British thermal units after trading today between $2.145 and $2.215. December settled 6.3 cents higher at $2.483. Other deferreds ended up by one-half to 5.9 cents. ''The cash jumped today on the weather, and November settled above the gap (at $2.18), which was obviously bullish, but next week is going to be warmer than normal and storage is going to be near full,'' said one Midwest trader. Despite improved technicals and some early cold, many remained skeptical of the upside, adding only a sustained bout of winter-like weather could spike prices much higher. Injection estimates for Wednesday's weekly AGA inventory report range from 38 bcf to 65 bcf. For the same week last year, stocks gained 63 bcf. WSC expects slightly above normal East Coast temperatures Tuesday to drop to as much as 16 degrees F below normal Thursday and Friday before moderating to just several degrees below normal by the weekend. Cool Midwest readings of as much as 16 degrees below normal will climb to near normal by Saturday. Texas at midweek will dip to seven to 14 degrees below normal, then warm to near normal by Friday and Saturday. The Southwest will average two to 10 degrees below normal for the period. While the NWS six- to 10-day forecast released late Tuesday called for normal to above normal U.S. temperatures, at least one private forecaster disagreed, expecting another push of cold air from Canada into the Midwest and East. Chart traders said November's close today above the $2.16-2.18 gap likely signaled more upside, particularly with ACCESS trading tonight above the 40-day moving average in the $2.215 area. Next resistance was seen at $2.25, with further selling likely in the $2.40 area. Major support was still pegged at $2.03, with more buying expected at $2.015 and then in the mid-$1.90s, a measurement from last Monday's gap. In the cash Tuesday, Gulf Coast swing quotes on average jumped 20 cents or more to the low-$1.90s. Midwest pipes scored similar gains to the $1.90-1.95 area. In the West, El Paso Permian firmed almost 20 cents to the low-$1.90s. Gas at the Chicago city gate rallied another 15 cents to the mid-teens, while New York was more than 20 cents higher in the mid-to-high teens. The NYMEX 12-month Henry Hub strip gained 2.8 cents to $2.289. NYMEX said an estimated 69,463 Hub contracts traded today, up from Monday's revised tally of 48,827. Colder weather boosts U.S. spot natural gas prices NEW YORK, Oct 20 - U.S. spot natural gas prices jumped an average of 20 cents Tuesday after this season's first spurt of cold weather triggered new buying, industry sources said. Swing gas prices at Henry Hub rose about 21-22 cents to $1.94-1.96 per mmBtu, with deals reported done anywhere from $1.75 to $2.02. In the Midcontinent, prices similarly gained another 21 cents to the low-$1.90s, while Chicago city-gate prices were quoted mostly at $2.15-2.17. In west Texas, El Paso Permian gas traded widely at $1.82-1.955, with most business reported done near $1.90. Waha values were quoted at $1.88-1.95, and the San Juan market was seen at $1.82-1.93, with the bulk of the trades seen closing in the high-$1.80s. The five-day outage on the San Juan lateral is scheduled to begin next Monday, affecting about 625 million cubic feet per day (mmcfd) of gas out of a total of 800 mmcfd. The San Juan lateral runs from Ignacio, Co., to Blanco, N.M. On the East Coast, New York city gate prices followed Gulf values higher again to $2.17-2.23. This price rally may be short-lived, sources said, as next week's forecast shows above-normal temperatures across most of the U.S., excluding the East and Gulf Coasts where seasonal weather is expected. Canadian natural gas rises on border demand NEW YORK, Oct 20 - Canadian spot natural gas prices continued to strengthen Tuesday, helped by a sustained heating demand from the U.S., less supply in Alberta and a firmer futures market, industry sources said. Field receipts in Alberta as of Monday evening stood at 12.534 billion cubic feet per day. Day prices at Alberta's AECO storage hub were quoted at C$2.57-2.64 per gigajoule (GJ), indicating a gain of about six cents from Monday. For the rest of the month, prices were discussed at C$2.63-2.64, while November business was reported done about three to four cents higher at C$2.77-2.78. In the export market, prices also moved higher. At the Sumas / Huntingdon export point, prices rose by about 10 cents to the low US$1.90s per million British thermal units (mmBtu). In the East, Niagara prices were similarly talked higher at US$2.07-2.13 per mmBtu. NYMEX's November contract jumped to a high of $2.215, up 7.2 cents, in Tuesday's session. 10/20 22:54 Crude oil futures rise in U.S ACCESS trade LOS ANGELES, Oct 20 - U.S. December crude oil futures edged up from their NYMEX close in active after-hours trading on Tuesday. By 1930 PDT, the new front-month December crude contract was trading at $13.58 a barrel, a gain of six cents from its NYMEX close where it finished one cent lower at $13.52. Dealers said this indicated that traders wanted to buy crude after a surprising drop in U.S. supplies. A weekly report, which gauges supply trends, showed an unexpected decrease of 290,000 barrels in crude oil. Analysts surveyed by Reuters expected a gain of four million barrels in the report. The declines signalled that traders should buy back futures in case inventory drops further. "It's an initial reaction to API data," one dealer said. "People ... did a little buying," on ACCESS. Volumes in crude oil were heavy, with 1,837 lots traded in all futures months, and 1,272 in the front-month. November heating oil also traded actively, with 580 lots exchanged for all futures months. On ACCESS, heating oil rose 0.25 cent from its NYMEX close. Trader attributed the rise to a surprising fall in distillate inventories, with levels down by 2.4 million barrels. Traders had forecast stronger gains. "Maybe we'll see a little support with shorts buying back tomorrow," a dealer said. November unleaded gasoline eased 0.10 cent a gallon after rising to 42.95 cent on NYMEX trade.

To: Kerm Yerman who wrote (12903)	10/21/1998 12:18:00 PM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

OIL AND NATURAL GAS PRICING SCENE - PART 3 WEDNESDAY AM 10/21/98 10/21 01:57 US Crude Outlook - Oversupply turns market bearish The U.S. crude oil market will feel the pressure of several ships of foreign oil heading to the U.S., particularly since U.S. demand for crude is not very strong, traders and analysts said on Wednesday, after the release of the latest U.S. inventory data. "I think we are heading down. There is a significant upswing in (crude) imports," Ritterbusch said, pointing to a fleet of ships carrying Brent towards the U.S. market. One U.S. trader is said to be bringing four Ultra Large Crude Carriers (ULCCs) of the light sweet European crude towards the Gulf Coast, while other traders are also said to be showing November Brent in the U.S. Gulf at discounts around 75 cents under December West Texas Intermediate. Each ULCC carries more than 300,000 tons, or more than two million barrels of crude. While imports are said to be streaming in, few companies are keen to build stocks any higher given the relatively narrow "roll" between November and December prices of U.S. benchmark WTI. "The roll is coming off at the moment, but you're not going to see anyone rushing to build stocks with this contango," said one Gulf Coast crude trader. November crude is now trading between 20-18 cents a barrel lower than December crude, not enough incentive to store barrels. News of production disruptions in Nigeria is not proving especially supportive of crude markets, traders said, noting that there were still ample early November barrels and still some October barrels of West African crudes as yet unsold. A series of community disturbances in Nigeria have stopped one fifth of the country's production, but traders said they were still monitoring the situation. The latest U.S. inventory figures released earlier this week are not much help either, and traders dismissed the odd figures, saying they reflected short-term disruptions caused by hurricane Georges. While the American Petroleum Institute (API) figures showed a sharp drawdown of 3.8 million barrels, the U.S. Department of Energy report showed a build of 2.7 million barrels in U.S. stocks of crude oil. "The statistics were neutral to bearish," said Nizam Sharief of Hornsby & Co., adding that the the disparity in the weekly reports reflected the disruptions caused by hurricane Georges, the fourth storm to pound the Gulf of Mexico in as many weeks. "In the very near term, we are going to drop below $15," Sharief predicted. The front-month November contract on the New York Mercantile Exchange settled 44 cents lower at $15.06 on Wednesday, and touched a low of $15.02 in intraday trading. Analysts pointed bearishly to the relatively high product inventories, especially in distillate stocks, which include stocks of heating oil. While U.S. stocks of gasoline are 9.75 million barrels higher than last year's levels, those of distillates are 16.86 million barrels higher than last year. On the demand side, the picture is also bearish in the short-term, since Sun's cuts of 177,000 barrel per day (bpd) at its two-refinery complex in Philadelphia, Pennsylvania are expected to continue until the end of the month. Similarly, Tosco's 110,000 bpd refinery in Bayway, New Jersey is not expected back up until the second half of October. Also, the crude unit at British Petroleum's 250,000 bpd Belle Chase refinery in Louisiana still hasn't been brought back on stream after a fire broke out in the unit last week. The crude unit is expected to remain shut for another week or so, according to a company statement. Expectations are that Chevron's Pascagoula refinery in Mississippi will be shut even longer after it suffered flooding when Hurricane Georges pounded the area late last month. 10/21 01:58 U.S. Product Outlook-firm on extended outages Extensive unplanned refinery shutdowns due to Hurricane Georges last week boosted U.S. Gulf Coast gasoline prices, and the rally is expected to continue as two major plants were affected, traders said on Monday. "Looking at the fundamentals as far as refining is concerned, the shutdowns will put more buyers in the market than anticipated,"a Gulf Coast trader said. The hurricane which hit the Gulf Coast a week ago took down at least seven refineries in Louisiana and Mississippi. Five of them escaped any damage but the precautionary shutdowns took out around a week's worth of 928,000 barrel-per-day of production, traders said. But what sent buyers into the market and prices soaring in "refining row", was the longer lasting mayhem the hurricane brought at Chevron Corp's <CHV.N> and BP's <BP.L> plant. Hit by floods, Chevron's 295,000 bpd refinery at Pascagoula, Miss. had some five feet of silt and would take at least a month to begin its start up process, traders said. More pessimistic sources said the plant will be shut until the end of the year but the company declined to comment on the duration of the shutdown. Although largely unscathed by the hurricane, a fire broke out at BP's 250,000 bpd Alliance refinery at Belle Chasse, LA. during its start up process on Wednesday. It restarted its 100,000 bpd catalytic cracker and 37,800 bpd reformer and other secondary units on Sunday but its crude unit will remain shut for another seven to ten days. "Chevron is quite a large producer on the Gulf Coast and I think it will keep the market supported," a trader said. "Gasoline will and can climb even higher...I wouldn't be surprised if the conventional gasoline will go into a premium...it is near enough." Gasoline outright prices on the Gulf Coast rose nearly 3.00 cents per gallon last week to around 45.00 cents. Its differential to the NYMEX rose from a 3.75 cent discount to the NYMEX before the hurricane hit, to 0.25 cent premium on Monday. With the cut in output, traders expected another drawdown in gasoline stocks which fell 1.8 million barrels to 21 million in the week ending Sept. 25 according to the American Petroleum Institute (API). Both BP and Chevron were amongst the aggressive buyers seeking mainly the gasoline, jet fuel and low sulphur diesel. But high stocks of heating oil capped any rallies in both the Gulf and the northeast, and prices in both hubs slipped by around 1.5 cents per gallon to around 40 cents per gallon. The API reported weekly stocks grew 2.5 million barrels to 15.3 million, around 16.7 million higher than last year's build. While an influx of Russian gas oil was also putting a lid on New York Harbor heating oil prices, gasoline arbitrage cargoes were also going to depress Harbor prices. "Give it five to six days...then prices will be slaughtered," a trader said on the expected arrival of cargoes. But other traders were more skeptical. "There is a lot of talk of incoming cargoes but until I see them will I believe it. You won't be seeing these sort of premiums if the market wasn't tight," a trader said. Harbor outright gasoline prices have actually fallen a quarter cent to around 45.60 cents per gallon, but reformulated grades differentials have risen by nearly 1.75 cents, climbing into a premium of around 1.25 cent to the NYMEX on Monday. Conventional differentials on Monday also flipped to 0.25 cent over the NYMEX from a discount as low as 0.50 cent. 10/21 09:44 NYMEX Dec crude open seen up 20 cts on API draw NEW YORK, Oct 21 - December crude on the New York Mercantile Exchange was called to open 10 to 20 cents higher Wednesday, as traders said a small crude stockdraw in the American Petroleum Institute's latest weekly inventory data was seen as bullish. November heating oil was expected to start 0.25 to 0.50 cent higher while gasoline was seen opening unchanged to a little higher than Tuesday's close. The API said late Tuesday there was a draw in U.S. crude stocks of 290,000 barrels for the week ended October 16, defying forecasts of a build of about four million barrels. 10/21 10:47 NYMEX crude, heat oil surge on API draws NEW YORK, Oct 21 - The new December crude oil contract on the New York Mercantile Exchange surged in early trading Wednesday, buoyed by a slight drop in U.S. crude stocks in the latest industry weekly inventory report. "On the face of it, people consider the API crude draw as not bearish enough, but the buying that's going on is unexplainable," said a New York oil trader, adding there were "outright buying" on December crude. "Its confusing because the Department of Energy has reported a vastly different figure," he said. In its own weekly data released early Wednesday, the DOE reported a crude stockbuild of 3.5 million barrels, closer to market estimates. The American Petroleum Institute reported late Tuesday that for the week ended October 16, there was a small 290,000-barrel drop in crude oil inventories nationwide, though after a revision to the previous week's data was taken into account they were up more than 500,000 barrels. But traders said the API data was confusing because of lower refinery runs and a rise in import for the past week. At 1034 EDT/1434 GMT, December crude was up 44 cents at $13.96 a barrel, near its early high of $13.98. The contract opened at $13.62, up 11 cents from Tuesday's settlement. November heating oil was up 1.10 cents at 38.85 cents a gallon, easing from an early jump to 38.85 cents as players called "supportive" an API draw of 2.4 million barrels. The DOE "confirmed" the figure with a slightly lower draw of 1.9 million barrels. November gasoline was up 0.40 cent at 43.35, lagging behind the rise in crude and heating oil as traders said the slight build of 384,000 barrels in the API data and 1.9 million barrel increase in the DOE's were within market expectations. "While the DOE data overall appear neutral to bearish, the market seems to think the complex is due for a rebound because of recent large losses," said a NYMEX trader. "And so the market may be giving the API some credit, but traders are at a loss to explain it." he added.

To: Kerm Yerman who wrote (12903)	10/22/1998 10:21:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

CANADIAN STORIES IN THE NEWS - THURSDAY A.M. 10/22/98 Oilpatch cuts spending by 28 per cent: CERI Calgary Herald A dramatic drop in oil spending will signal a sharp 13-per-cent plunge in petroleum investment for this year, an energy think tank reported Wednesday. The cash-strapped petroleum industry will cut spending 28 per cent to about $4.6 billion for all of 1998, the Canadian Energy Research Institute said in a new study. Spending on natural gas -- the industry's lone bright spot this year -- will not improve enough to offset the overall slide, with investment on that side of the sector rising modestly to $7.13 billion from $7.03 billion in 1997. The study says companies will continue to shift spending to natural gas -- a move fuelled by oil prices wallowing in the $14 US a barrel range. About 60 per cent of projected spending will be gas-related over the next two years. "The first challenge facing producers will be to maintain those expenditures in the face of low crude prices," says the study's co-author, Len Coad. The increase in gas investment will lead to a significant increase in new wells, with 4,725 drilled this year in Western Canada, Calgary-based CERI says. Based on a survey of petroleum companies, the institute estimates 4,973 wells will be completed in 1999 and 5,297 in 2000. The projected fall in oil investment isn't a great surprise, given the year-long slump in crude prices, said Greg Stringham, vice-president of markets and fiscal policy for the Canadian Association of Petroleum Producers. Oil prices on the New York Mercantile Exchange closed up 56 cents to $14.08 US a barrel Wednesday, but are still down 32 per cent from the same time last year. Corporate cash flow levels, which fuel future oil and gas spending, have been punished by the weak oil prices, sparking concerns the Canadian industry won't be able to drill enough gas wells to meet increasing demand for the commodity. About 1.1 billion cubic feet of gas pipeline capacity is expected to come on stream this winter by TransCanada PipeLines and Northern Border. The ambitious Alliance pipeline will add another 1.3 billion cubic feet daily of gas in 2000. The survey indicates gas deliverability will rise nine per cent annually from 1997 to 2000. Coad said increased gas drilling should bring enough on stream to fill new pipeline space and replace declining reserves, but the timing appears tight. "The momentum that was established in 1997, and has been pretty much maintained so far this year, has to be maintained and built on through the next three years," he said. "If that momentum disappears, because of crude oil prices or some other reason, we're less optimistic." Natural gas prices have been buoyant this fall and the sector is on pace to drill about the same number of gas wells as it did in 1997, Stringham added. "There is a significant amount of new capacity coming on this year,'' he said. "I don't think we will see a supply shortage ... with the higher netbacks that producers are seeing, we are still maintaining gas drilling.'' Energy outlook drilled Calgary Sun DEMAND IS KEY A top Calgary energy analyst yesterday suggested the outlook for the oil and gas industry is so bleak that his audience better "throw away" their brochures for Porsches. And although the comment by Michael Tims, president of investment firm Peters and Co. Ltd., brought chuckles at the Canadian Deal Makers Expo at the Calgary Convention Centre. But Tims made it clear he was only half-joking when listeners were told what he was about to say "won't be easy" to hear. Tims said it is going to be extremely difficult for oil and gas companies to generate high returns in the near future and predicted much weaker capital spending. Some other speakers -- including David Manning, president of the Canadian Associations of Petroleum Producers (CAPP) --weren't as pessimistic, but most agreed the industry is in one of its cyclical downturns. Manning said the industry's current "salvation" rests on high demand for natural gas and high prices. He described the appetite for natural gas as being "voracious" and said such issues as the U.S. Clean Air Standards Act, the Kyoto Agreement, and nuclear power plant shutdowns in Canada and aging plants in the U.S will increase demand and price for natural gas. The conference is being sponsored by PLS Canada and PLS USA -- and by Energy Communications Inc. It has the general endorsement of CAPP, Canada's most prestigious petroleum association. Manning was actually upbeat about the general strength and resilience of the industry, pointing out that last year it did $31 billion worth of business and invested $19 billion in capital expenditures. "This is an industry with tremendous value," he said. His words came as Imperial Oil announced its nine-month profits had fallen $157 million -- and just a day after Petro-Canada said its third-quarter profits had fallen 72% to $21 million compared to 1997. As well, Canadian Occidental Petroleum reported a third-quarter loss of $19 million. But Manning, a former Alberta deputy minister of energy, pointed to heavy exploration, development and production activity ranging from Norway to the Caspian Sea to Canada's own Hibernia, to underline the industry's basic strength. He said there was no doubt the worldwide industry could produce more oil than it could sell -- and this meant prices would be low or uncertain until events changed. Tax refund lifts profits at Canada's Imperial Oil TORONTO, Oct 20 - Imperial Oil Ltd. (Toronto:IMO.TO - news), Canada's biggest energy company, said on Wednesday that a hefty tax refund lifted its quarterly earnings to near last year's levels despite a 30 percent drop in world oil prices. Toronto-based Imperial, which produces oil and gas in western Canada and refines and markets gasoline across the country under the Esso banner, posted third-quarter net earnings of C$196 million or C$0.45 a share, down slightly from C$201 million or C$0.44 a share in 1997. Earnings included a C$59-million gain from an income tax refund Imperial received in late September as part of a settlement with the Canadian government over taxes its resources division had overpaid in the 1970s and 1980s. The refund totaled C$140 million. Third-quarter revenues, meanwhile, were C$2.3 billion, down from C$2.7 billion last year. Excluding the gain, operating results suffered because weak prices for crude oil and gasoline and other products overshadowed increased production of heavy oil, synthetic crude derived from Alberta oil sands and chemicals, Imperial said. The company is 69.6 percent owned by U.S. oil major Exxon Corp. (NYSE:XON - news) World oil prices that have hovered at 10-year lows for several months amid a worldwide glut and lower demand, especially from ailing Asian economies, have also taken their toll on Imperial's Canadian integrated oil peers. On Tuesday, Calgary-based Petro-Canada, the country's No. 2 integrated oil firm, reported a 79 percent drop in quarterly profits and warned it was planning its operations based on expectations of another two years of weak oil markets. Imperial's resources division, known mostly for its big heavy oil production operation at Cold Lake, Alberta, and its 25 percent interest in the Syncrude Canada Ltd. oil sands mining and extraction development, posted third-quarter operating earnings of C$55 million, down 44 percent from last year. Total oil production averaged 293,000 barrels a day during the quarter, up nearly six percent from 277,000 in 1997. Natural gas sales averaged 350 million cubic feet a day, up almost two percent from last year's 344 million. Imperial's petroleum products division pumped out an operating profit of C$56 million during the quarter, down 41 percent from the year-earlier period. The company cited a drop in refining and marketing margins, or the difference between the cost of crude oil at the refinery gate and the price at which finished products are sold, for the the big decline. Chemical manufacturing earnings rose by 57 percent to C$36 million, but that figure included a C$22 million gain from the sale of a chemical additive business during the third quarter. Imperial's shares on the Toronto Stock Exchange were unchanged at C$23.65 in afternoon trade on Wednesday. Shell Canada Ltd (Toronto:SHC.TO - news), the remaining Canadian integrated oil company still to report results for a disappointing third quarter, is slated to issue them next Wednesday. As reported by Financial Post - Imperial profit steady A tax refund and oil production increases held earnings steady in the third quarter at Imperial Oil Ltd. The oil company yesterday reported a profit of $196 million (45¢ a share), down 2% from $201 million (44¢) last year. Earnings per share were higher because it bought back 2.6 million of its shares for $64 million in the quarter. Imperial is 69.6% owned by Exxon Corp. of Irving, Tex. Earnings included a $59-million gain on a $140-million tax refund from a 1992 court decision on overpayment. Revenue took a hit from lower oil prices, falling to $2.3 billion, from $2.7 billion last year. Cash flow from operations declined to $395 million, from $487 million. "Imperial's operations continued to perform well, with year-to-date record production at Cold Lake, Syncrude and in chemicals," said chairman Bob Peterson. "Unfortunately, that solid operating performance was not enough to offset the continuing weakness in crude oil and product markets." Earnings were sharply lower in the natural resources division, declining to $55 million from $98 million last year. Oil and natural gas liquids production increased to 293,000 barrels a day, from 277,000 b/d, mostly because of higher output at the Cold Lake, Alta., heavy oil operations. The project produced an average 153,000 b/d, up from 126,000 b/d. Imperial's share of production at the Syncrude oilsands plant, of which it is the largest shareholder and the operator, slipped to 51,000 b/d, from 58,000 b/d, because of a maintenance shutdown this summer. Natural gas production was 287 million cubic feet a day, up from 257 million cubic feet. The Toronto-based company received average prices of $17.49 a barrel for conventional crude oil, down from $23.53 last year; $16.30 a barrel for heavy oil, down from $20.77, and average natural gas prices of $1.86 per thousand cubic feet, down from $1.79. Imperial shares (IMO/TSE) closed yesterday at $23.60 down 5¢. Precision Drilling warns of soft second quarter The Financial Post Precision Drilling Corp., a major oil and gas drilling company, warned yesterday second quarter earnings will be a third lower than expected. With the oil and gas industry paralysed by low oil prices and reduced access to equity and debt, utilization rates for drilling and other oilfield services are 30% to 35% lower than anticipated. The lower activity level will reduce earnings and revenue by a similar amount, said senior finance vice-president and chief financial officer Dale Tremblay. The company is now expected to post earnings for the quarter ending Oct. 31 of about 20¢ a share, compared with an earlier consensus estimate of about 30¢ a share. "No drilling," Tremblay said. "The price of oil is down, so exploration and production companies have restricted budgets and they will not drill." The company said in a statement it felt it appropriate to advise shareholders and the market of the industry's highly competitive conditions. Results for the period are due in December. The warning sent Precision stock (PD/TSE) down 35¢ to $17.75. With 214 drilling rigs, the company has a 38% share of the Canadian oil and gas drilling market. Rig utilization rates industry wide have slipped below 30% in recent weeks, down from the 70%-range during the same period last year. There were 161 active drilling rigs in the week ended Oct. 20 out of an industry fleet of 579, according to figures compiled by the Canadian Association of Oilwell Drilling Contractors. Low activity levels are hurting the sector across the board, said Don Herring, the association's managing director. The group, which today will reveal its drilling forecast for 1999, is predicting a higher activity rate of 225 drilling rigs in the fourth quarter, driven by producers looking for more natural gas to fill new pipelines. Drilling in 1999 should be 6% higher than this year, when 10,200 wells are expected, Herring said. "Oil and gas companies have got to do some drilling or we are going to have a bunch of pipelines that aren't filled." Many analysts expect this year's final count will be lower than 10,000 wells, down from 16,400 last year. "It's looking ugly," said Miles Lich, oilfield services analyst at Peters & Co. Ltd. in Calgary. Peters & Co. is predicting even softer conditions for next year, with activity stagnating at 9,000 wells, just off the 9,500 forecast this year. Some relief will be provided by higher natural gas drilling, but with the industry still 60% focused on oil, it won't be enough to fuel a significant drilling recovery until the end of 1999 or in 2000, Lich said. Hibernia crude sold to Canadian refineries CALGARY, Oct 21 - Two partners in the Hibernia oil project off Canada's east coast said on Wednesday they sold crude from the development to Canadian refineries for the first time since production started last year. Petro-Canada <PCA.TO> and Norsk Hydro <NHY.OL> said a 430,000 barrel cargo of Hibernia crude was being pumped into the refinery at Come By Chance, Newfoundland, owned by Dutch trading group Vitol. The rest of the cargo on the Hibernia consortium's tanker M/T Mattea, 420,000 barrels, was to be offloaded at a Portland, Maine terminal, then shipped by pipeline to Petro-Canada's refinery in Montreal. Petro-Canada spending cuts won't affect Grand Banks St Johns Evening Telegram 10/22/98 Petro-Canada will not downgrade exploration or development plans for the Grand Banks despite a planned $300-million cut in capital spending over the next two years, a company spokesman said from Calgary Wednesday. Petro-Canada announced third quarter profits Tuesday that were down 80 per cent from a year ago, prompting company president and CEO Jim Stanford to announce “we are going to live within our means … Accordingly we are adjusting Petro-Canada's strategies and asset portfolio Those adjustments include a 10 per cent reduction in capital spending in each of the next two years, for a total of $300 million. Stanford also said he expected world oil prices to remain low for another two years. But the company isn't scaling back on the East Coast — at least not yet. “We're certainly still committed to and excited about the seven-well drilling program that's going to begin on the Grand Banks in November with the Hebron field,” spokesman Rob Andras said. The company also remains firm with its Terra Nova commitment, he said. “The bottom line is we will continue to invest in what we see as our growth areas,” Andras said. The company still plans to invest about $1 billion in capital expenditures this year and likely the same next year, Andras said, but added not all decisions on spending have been made. Petro-Canada reported a profit of $15 million or six cents a share for the three months ending Sept. 30, down from $73 million and 27 cents a share a year earlier. Natural gas reinjection starts St Johns Evening Telegram After a two-month setback, Hibernia Management Development Co. Ltd. has started reinjecting natural gas into its sandstone reservoir five kilometres beneath the ocean floor. A gas reinjection plan has been on the books since the project began — as a means of increasing reservoir pressure and preserving a potential resource — but the process was delayed in mid-August when approximately 5,000 metres of coil tubing became stuck in the well. Workers eventually removed about 3,000 metres of tubing and decided to inject gas around the remaining material, although at a reduced rate. The Canada-Newfoundland Offshore Petroleum Board confirmed in its weekly public status report Tuesday that Hibernia well B-16-5 is injecting gas. Two additional water injection wells are also up and running and oil production will likely reach the anticipated maximum capacity of 150,000 barrels a day shortly. Gas reinjection also significantly reduces the platform's gas flare and reduces emissions of the suspected greenhouse gas, carbon dioxide. Hibernia has not confirmed it is successfully injecting gas but it expected to do so later this week when it wraps up a series of tests. With a successful gas-injection program, Hibernia should be back on target to produce 25 million barrels of oil in its first full year of production. In addition, the 150,000 barrel-per-day maximum capacity is expected to be increased with platform modifications and “de-bottle-necking.” HMDC will wait until two additional gas injection wells are complete in about a year's time before removing the remaining tubing and completing repairs on the initial gas injection well. In its third-quarter results released Tuesday, Petro-Canada — which owns a 20 per cent share of Hibernia — states two gas injectors and three water injectors are expected to be complete by the end of 1998. Workers slap liens on Suncor Edmonton Sun Dominion Bridge fallout Unpaid workers have slapped liens against Suncor Inc. following the collapse of contractor Dominion Bridge Inc. Dozens of Alberta members of the International Brotherhood of Boilermakers, Lodge 146, have filed liens claiming amounts ranging from about $300 to almost $6,000. Lodge officials could not confirm exactly how many claims have been passed on to their lawyers, estimating them at about 50. But the claims also include work done for Dominion Bridge at Imperial Oil's Cold Lake operations, they said. Suncor spokesman Brenda Erskine said the company has a fund to pay out lien claims, as required by law. Suncor lawyers are now examining how the claims will be dealt with under the terms of the law, she said. Dominion Bridge Corp., the Montreal-based parent of subsidiaries including Dominion Bridge Inc., filed a petition Aug. 11 for court protection against 2,000 creditors owed at least $140 million. Dominion Bridge Inc., a steel fabrication subsidiary active across Canada, was officially declared bankrupt last month and shut down its Nisku and other yards. It employed 800 staff, most in Lachine, Que. and Winnipeg. Bankruptcy trustee Richter & Partners Inc. has put its assets up for sale - including manufacturing equipment, cranes, tools, shop equipment, office and computer equipment, lift trucks and automobiles.