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

To: Kerm Yerman who wrote (13012)	10/26/1998 7:31:00 PM
From: Herb Duncan	Respond to of 15196

FIELD ACTIVITIES / Trans-Dominion - Zeynel-11 Well, Zeynel Field, S.E. Turkey Tests @ 3,000 Bopd TSE SYMBOL: TDE OCTOBER 26, 1998 CALGARY, ALBERTA--Trans-Dominion Energy Corporation has been informed by the Operator of the Zeynel Field, Aladdin Middle East Ltd. that the most recent well drilled in the Field, Zeynel-11, has tested at an initial rate of 3,000 bopd of 24 degree API oil. This initial production rate is the highest that has been recorded, to date, in the Zeynel Field and is probably due to extensive fracturing of the reservoir near the well-bore. The sustained flow rate from the well is likely to be lower than this initial rate. Trans-Dominion Energy Corporation has a 12.5 percent gross overriding royalty on the Zeynel Production Lease.

To: Kerm Yerman who wrote (13012)	10/26/1998 7:34:00 PM
From: Herb Duncan	Respond to of 15196

SERVICE SECTOR / Prudential Steel - Reduced Drilling Activity Affects Overall Demand in Third Quarter TSE SYMBOL: PTS OCTOBER 26, 1998 CALGARY, ALBERTA-- /T/ SUMMARY Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 ----------------------------------------------------------- Earnings per Share $0.06 0.33 $0.34 0.99 Shipments, Metric Tonnes 33,229 90,994 138,299 264,340 Per Tonne 1998 1997 1998 1997 ----------------------------------------------------------- Sales $1,046 938 $ 959 955 Cost of Sales 862 733 779 745 Gross Profit 184 205 180 210 /T/ Prudential Steel Ltd. announced net income in the third quarter 1998 of $2.0 million or $0.06 per share. Net income for the nine months to date is $10.3 million, or $0.34 per share, which is reflective of the current decrease in oil and gas drilling activity. Net income in the same period of 1997 was $29.8 million, or $0.99 per share, when oil and gas activity was at an all time high. Sales for the third quarter were $34.7 million on shipments of 33,229 tonnes. Shipments in the first nine months of 1998 were 138,299 tonnes, down 48 per cent from the same period of 1997. Shipments of energy related products increased nine per cent from the second quarter 1998, while industrial products fell 10 per cent due to difficult economic conditions in British Columbia and overall lower consumption in the western Canadian agricultural markets. Average selling prices for the first nine months of 1998 have increased marginally compared to the same period last year due to a greater proportion of proprietary products and higher grade steel products in the line pipe and oil country tubular goods sales mix. This is particularly evident in our third quarter 1998 selling prices, compared to the third quarter 1997. The increased sales of these products is applicable to an increased industry focus on gas-related activity. Selling prices of industrial products were down marginally from the second quarter. Compared to the third quarter 1997, the increased average cost of sales per tonne is a result of higher costs of steel due to higher grade product mix, overall steel price increases and volume adjustments to mill utilization. Gross margins during the third quarter have declined from the same period in 1997. However, third quarter gross margins are up from the second quarter 1998, largely influenced by changes in product mix. OUTLOOK Exploration and production companies are currently facing restricted cash flows due to low commodity prices, compounded by limited access to capital markets for funds required for increased drilling. Traditional seasonal increases for energy related products are expected during the fourth quarter, however industry uncertainty exists over the level of activity that can be expected during the winter drilling season. Predictions for a cold winter, continued strength in gas prices, anticipated increased drilling to meet depletion rates, new gas gathering and infrastructure programs and commitments to fill the demand created by the Alliance Pipeline Project are positive factors in our outlook. Prudential's production levels and costs have been adjusted to reflect current activity and inventory levels, and we continue to be well positioned to respond quickly to changes in market demand. Selling prices for energy-related products may face additional pressure from increased competition due to imports. However, on the cost side, foreign and domestic steel prices have recently declined which will improve costs. Steel prices may rise slightly in the new year as the supply of import steel is restricted due to U.S. trade actions against Japan, Brazil and Russia. Expenses related to information systems upgrades and Year 2000 compliance are expected to decline as these projects are completed in 1999. CAPITAL PROGRAM UPDATE The Mill #2 upgrade in Calgary will be completed during the fourth quarter, increasing mill operating efficiencies and providing the ability to manufacture 80-foot lengths of line pipe. The Longview, Washington expansion program is on schedule and is expected to initiate production of industrial products early in December. Production levels are expected to ramp-up based on market conditions throughout 1999. Due to the U.S. /Canadian exchange rate and higher than anticipated site preparation costs, the estimated capital expenditure for the Longview facility has increased from $23.3 million to $27.1 million. To date, approximately $19 million has been spent on the project. YEAR 2000 COMPLIANCE GOAL Prudential Steel's year 2000 compliance program is on schedule, with our critical business operating systems to be compliant by December 31, 1998. All non-critical systems are expected to be compliant by March 31, 1999. Other elements of our year 2000 compliance program include a review of our supply chain and contingency planning, which are currently underway and expected to be completed during 1999. Expenditures related to system and hardware upgrades are not expected to materially impact financial results. DIVIDEND DECLARED The Board of Directors on October 26, 1998 declared a dividend of $0.05 per share for the shareholders of record at the close of business on December 15, 1998 to be paid on or about December 31, 1998. Prudential Steel is listed on The Toronto Stock Exchange and trades under the symbol PTS. /T/ Prudential Steel Ltd. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS ($ in thousands, except per share amounts) PREPARED WITHOUT AUDIT ------------------------------------------------------------ THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30 SEPTEMBER 30 1998 1997 1998 1997 ------------------------------------------------------------ Sales $34,746 $85,394 $132,572 $252,346 Cost of sales 28,637 66,697 107,690 196,815 ------------------------------------------------------------ Gross profit 6,109 18,697 24,882 55,531 ------------------------------------------------------------ Expenses Selling, general and administration 1,947 2,116 6,053 6,041 Interest (income) expense 116 (200) (226) (509) Depreciation 827 954 2,586 2,839 ------------------------------------------------------------ 2,890 2,870 8,413 8,371 ------------------------------------------------------------ Income before income taxes 3,219 15,827 16,469 47,160 Income taxes 1,219 5,814 6,122 17,338 ------------------------------------------------------------ Net income for the period 2,000 10,013 10,347 29,822 Retained earnings, beginning of period 84,842 59,549 79,518 42,255 Cash dividends (1,512) (1,511) (4,535) (4,026) ------------------------------------------------------------ Retained earnings, at end of period $85,330 $68,051 $85,330 $68,051 ------------------------------------------------------------ Earnings per share -Basic $0.06 $0.33 $0.34 $0.99 -Fully diluted $0.06 $0.33 $0.33 $0.97 ------------------------------------------------------------ Shipments, Metric Tonnes 33,229 90,994 138,299 264,340 ------------------------------------------------------------ Prudential Steel Ltd. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ($ in thousands) PREPARED WITHOUT AUDIT ------------------------------------------------------------ AS AT AS AT SEPTEMBER 30 DECEMBER 31 1998 1997 1997 ------------------------------------------------------------ Current Assets Cash and cash equivalents $ --- $26,309 $26,279 Accounts receivable 16,583 47,413 53,183 Inventories 86,254 54,980 64,285 Prepaid expenses 637 667 468 ------------------------------------------------------------ Total current assets 103,474 129,369 144,215 ------------------------------------------------------------ Current Liabilities Bank loans 10,234 --- --- Accounts payable and accrued liabilities 14,478 35,409 38,070 Income taxes payable --- 9,155 12,687 ------------------------------------------------------------ Total current liabilities 24,712 44,564 50,757 ------------------------------------------------------------ Working capital 78,762 84,805 93,458 Property, plant, and equipment 49,362 25,841 28,434 Deferred pension expense 1,186 1,358 1,863 ------------------------------------------------------------ Capital employed 129,310 112,004 123,755 ------------------------------------------------------------ Deduct Post employment benefits payable 478 469 465 Deferred income taxes 1,549 1,622 1,910 ------------------------------------------------------------ Shareholders' equity $127,283 $109,913 $121,380 ------------------------------------------------------------ Shareholders' equity is represented by Common shares 41,953 41,862 41,862 Retained earnings 85,330 68,051 79,518 ------------------------------------------------------------ $127,283 $109,913 $121,380 ------------------------------------------------------------ On behalf of the Board: J. Donald Wilson President and Chief Executive Officer Norman W. Robertson Chairman of the Board Prudential Steel Ltd. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION ($ in thousands) PREPARED WITHOUT AUDIT ------------------------------------------------------------ THREE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30 SEPTEMBER 30 1998 1997 1998 1997 ------------------------------------------------------------ Operating Activities Net income for the period $2,000 $10,013 $10,347 $29,822 Add (deduct) items not affecting cash Depreciation 827 954 2,586 2,839 Deferred income taxes (223) (147) (361) (632) Deferred pension expense 504 78 677 234 Accrued post employment benefits (1) 7 13 23 (Gain) Loss on sale of property, plant, and equipment (23) --- (23) 40 ------------------------------------------------------------ 3,084 10,905 13,239 32,326 Net change in non-cash working capital balances related to operating activities 13,083 11,376 (21,967) (1,591) ------------------------------------------------------------ Cash (used in) provided by operating activities 16,167 22,281 (8,728) 30,735 ------------------------------------------------------------ Financing Activities Dividends paid (1,512) (1,511) (4,535) (4,026) Common shares issued --- 15 91 578 ------------------------------------------------------------ Cash used in financing activities (1,512) (1,496) (4,444) (3,448) ------------------------------------------------------------ Investing Activities Purchase of property, plant and equipment (8,713) (2,113) (23,514) (3,678) Proceeds from sale of property, plant and equipment 23 --- 23 48 Net change in non-cash working capital balances related to investing activities 258 305 150 181 ------------------------------------------------------------ Cash used in investing activities (8,432) (1,808) (23,341) (3,449) ------------------------------------------------------------ Net (decrease) increase in cash 6,223 18,977 (36,513) 23,838 Cash position, beginning of period (16,457) 7,332 26,279 2,471 ------------------------------------------------------------ Cash position, at end of period (10,234) 26,309 (10,234) 26,309 ------------------------------------------------------------ Cash position is represented by Cash and cash equivalents (456) 26,309 (456) 26,309 Bank loans (9,778) --- (9,778) --- ------------------------------------------------------------ (10,234) 26,309 (10,234) 26,309 ------------------------------------------------------------ HEAD OFFICE Suite 1800, 140 Fourth Avenue S.W. Calgary, Alberta T2P 3N3 (403) 267-0300 MAILING ADDRESS P.O. Box 1510 Calgary, Alberta T2P 2L6 INTERNET WEBSITE www.prudentialsteel.com MILL OFFICE 8919 Barlow Trail S.E. Calgary, Alberta T2C 2N7 REGISTRAR & TRANSFER AGENT CIBC Mellon Trust Company Corporate Trust Services 600, 333 Seventh Avenue S.W. Calgary, Alberta T2P 2Z1

To: Kerm Yerman who wrote (13012)	10/26/1998 7:35:00 PM
From: Herb Duncan	Respond to of 15196

FIELD ACTIVITIES / Energy North - 1998 Production Increase ASE SYMBOL: ENI OCTOBER 26, 1998 CALGARY, ALBERTA--Energy North Inc. has reported initial natural gas production rates of 2.6 million cubic feet of gas per day from a recently acquired well at Provost, Alberta. The well, in which Energy North Inc. has a 50 percent working interest is now producing from the uppermost of two Cretaceous sands which had combined initial flow tests of 4 million cubic feet per day. The lower zone will be put on production pending the granting of a commingling order from the Alberta Energy and Utilities Board which is expected prior to year end. The company also reports entering into a series of natural gas prone farmin arrangements with industry partners in the Fairview region of Northern Alberta and has commenced seismic acquisition programs. The company's fall drilling program will begin in early November with well's scheduled to be drilled on the Cadogan, Sibbald, Coronation and Eureka prospects. Energy North currently produces average daily production of 550 boe per day and through the first three quarters of 1998 has increased its percentage share of natural gas production to 50 percent of produced volumes. Additional natural gas and oil production is expected to be added prior to year end. Ninety five percent of the company's natural gas is being sold into the Alberta Spot Natural Gas market which has averaged $2.48 per thousand cubic feet for the month of October to date.

To: Kerm Yerman who wrote (13012)	10/26/1998 7:37:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Moxie Petroleum Advises Warrants Listed on ASE ASE SYMBOL: MOX OCTOBER 26, 1998 CALGARY, ALBERTA--Moxie Petroleum Ltd. ("Moxie") of Calgary advises that the Pre-paid Flow-through Warrants (the "Warrants") will be listed for trading on the Alberta Stock Exchange under the trading symbol MOX.WT on Tuesday, October 27, 1998. Moxie may, at its option, force the exercise of the warrants at any time after October 1, 1999 and before October 1, 2002 into common shares. The number of common shares obtained upon the exercise of each Warrant will be equal to $1.00 divided by the greater of $1.00 and the then current market price of the common shares. There are 5,988,270 Warrants outstanding.

To: Kerm Yerman who wrote (13012)	10/26/1998 7:38:00 PM
From: Herb Duncan	Respond to of 15196

CORP / Deena Energy Inc. Announces Update on October 21st News Release ASE SYMBOL: DNG OCTOBER 26, 1998 CALGARY, ALBERTA--Deena Energy Inc. announces that further to the press release of October 21, 1998, the time period for repayment of the bank loan has now been extended to the close of business on October 28, 1998. Deena Energy Inc. continues to review alternatives in order to restructure the company. Deena Energy Inc. is a Canadian oil and gas company listed on the ASE under the trading symbol, DNG.

To: Kerm Yerman who wrote (13012)	10/26/1998 7:40:00 PM
From: Herb Duncan	Respond to of 15196

FINANCING / Tethys Energy Inc. Announces Flow-Through Share Offering TSE SYMBOL: TET OCTOBER 26, 1998 CALGARY, ALBERTA-- THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. Tethys Energy Inc. (TET - TSE) today announced its intention, subject to regulatory approval, to sell up to a maximum of 1,200,000 flow-through common shares of the Company at an anticipated subscription price of $1.60 per share. The shares will be issued pursuant to exemptions from the registration and prospectus requirements of Canadian securities laws. The Company expects to have one or more closings of the offering prior to year-end. Anticipated gross proceeds of $1,920,000 will be used to fund the Corporation's 1998/1999 drilling and seismic programs. Tethys Energy is a Calgary-based oil and gas exploration company operating in Alberta and Southeastern Saskatchewan. Tethys shares are traded on the Toronto Stock Exchange under the trading symbol "TET". The flow-through common shares have not been and will not be registered under the United States Securities Act of 1933 and, as a result, these securities may not be offered or sold within the United States.

To: Kerm Yerman who wrote (13012)	10/28/1998 7:22:00 AM
From: Kerm Yerman	Respond to of 15196

REPORT / EIA review of APEC The report presents highlights of the energy situation in the group of countries belonging to the Asia-Pacific Economic Cooperation (APEC) forum. Included are charts showing U.S. trade with APEC countries and energy demand in APEC Countries. Also included are tables on Economic and Demographic Indicators and Energy Consumption and Carbon Emissions. APEC's next meeting is scheduled for mid-November at Kuala Lumpur, Malaysia. eia.doe.gov

To: Kerm Yerman who wrote (13012)	10/28/1998 9:27:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

OIL AND NATURAL GAS SCENE - WEDNESDAY 10/28/98 - PART 1 10/27 23:56 Vietnam says major gas deadlock could ease soon HANOI, Oct 28 - Ho Si Thoang, head of Vietnam's state oil and gas monopoly, said on Wednesday that a long-awaited agreement with a foreign alliance over pricing the country's largest gas reserves could be concluded by the end of the year. "I hope we will finalise soon the negotiations on the terms of the contract...maybe before the end of the year," Thoang told reporters on the sidelines at the opening of the new session of Vietnam's National Assembly. But a source close to the negotiations on the $1.5 billion project, which involves British Petroleum <BP.L>, Norway's Statoil [STAT.CN] and Petrovietnam, said Thoang's comments were premature. "Although recent progress has been good there are still key issues to be resolved," the source, who declined to be identified, told Reuters. "It's too early to say when a final agreement could be reached," he added. The BP and Statoil Alliance, which wants to tap gas reserves estimated at 58 billion cubic metres that were discovered four years ago, has been deadlocked with Petrovietnam over pricing since May last year. The gas lies 370 km (231 miles) off Vietnam's southeast coast in the Nam Con Son Basin in the Lan Tay and Lan Do fields, and is planned to be used for state-owned gas-fired power stations and an integrated power and urea fertiliser plant. Petrovietnam will purchase the gas and sell it on to state power generator Electricity of Vietnam. Steve Walker, the Alliance's director-general, said in July that delays in signing the agreement were costing Vietnam $700,000 a day. The costs included lost potential tax revenues, as well as the cost of importing diesel and the fact that generating electricity from diesel was more expensive than gas, Walker said. OPEC to take stock at Cape Town oil meet CAPE TOWN, Oct 27 - Just when oil producers thought prices couldn't get any worse, down they went again. OPEC ministers, descending upon Cape Town this week for a conference grouping some 50 major oil producing and consuming nations, could be forgiven for feeling cheated this month when prices sank to near 10-year lows for the third time this year. The anguish was understandable, for rarely has the fractious group been better at keeping its promises to restrain output and siphon off a ruinous global surplus of unwanted oil. And rarely has such good behaviour earned such meagre price rewards for the Organisation of Petroleum Exporting Countries. "OPEC looks like a tired sportsman. The muscles must be weakening after all the effort," said David Stedman of Daiwa Europe in London. Tempers, too, are taking the strain as prices stumble along at a third below last year, despite OPEC-led cuts which have amounted to four percent in world supply. "I do not accept that we become the victim of our compliance and credibility," Kuwait Oil Minister Sheikh Saud Nasser al-Sabah thundered recently at non-OPEC producers taking OPEC's market share. In what he said was a warning, not a threat, he said that if Saudi Arabia, the United Arab Emirates and Kuwait "wanted to flood the market and destroy non-OPEC economies, then the impact upon them would be grave." All eyes are on OPEC members once again, as they hold consultations on the sidelines of Capetown's October 29-31 international energy conference. Industry watchers want to know if OPEC and a handful of outsiders will prolong two rounds of output cuts beyond a mid-1999 deadline or reduce its production for a third time. Fretful producers will review the failure of the cartel's strategy to keep pace with the galloping spread of international economic malaise and resultant pressure on national revenues. The cash squeeze has pushed the industry into a race to consolidate to sustain the high cash flows necessary to run current operations. Oil companies have crouched into a defensive position with mergers, alliances, layoffs and cuts in precious exploration budgets that are the key to future production growth. Fresh evidence of restructuring has emerged with word that Venezuela is considering a big corporate alliance with a U.S. oil company to accelerate investment in Venezuela's reserves. At a meeting earlier this month, oil ministers from Venezuela, Mexico and Saudi Arabia said the output cuts of 3.1 million barrels per day (bpd) might be extended by six months to the end of 1999, depending on market conditions. But they said they were unwilling to countenance deeper cuts. OPEC heavyweight Venezuela and non-member Mexico argue that if good behaviour has not worked thus far, better behaviour is not the answer. Analysts say their state-owned national oil companies are under pressure to keep up production from large, poor populations and from nationalist politicians who portray OPEC cutbacks as threats to jobs, markets and revenues. They are also aware that international oil companies which invest in their oil industries are more than willing to cut precious spending on joint ventures if output is threatened. Others in OPEC differ, most notably Kuwait's Sheikh Saud, who advocates more output cuts if markets stay weak. Saudi Arabia has signalled it has an open mind but sees the priority as better compliance with existing reductions. In Cape Town, key members of the cartel will try to lay the foundations of an agreement for approval at a decision-making OPEC conference in Vienna in late November. Many analysts expect OPEC to choose to stick to output cuts agreed earlier in concert with non-member producers. "Inaction is the most likely outcome," said Daiwa's Stedman. "Everyone has been pleasantly surprised at the compliance rate, which has been remarkably good -- and look where the price is. To cut any more risks tearing OPEC's historic agreement with non-member producers. "Even if they agree more cuts, it's hard to see a sharp price rise because of oversupply," said Paul Cheng of Lehman Brothers. "But it would be prudent for them to extend the cuts." Asian oil demand, once the engine of growth for the global industry, may show a slow recovery next year but could still fall short of the pre-financial crisis levels of 1997. While OPEC producers have not abandoned big price ambitions of Brent at $17 or more, these are widely seen as unrealistic. "You're not going to see Brent at $17 any time soon," said Cheng. Norway to decide on oil cut after S.Africa meet OSLO, Oct 27 - Norway will decide whether to end or roll over a 100,000 barrel per day (bpd) self-imposed cut to crude production after a meeting of consuming and producing nations in South Africa this week, Oil Minister Marit Arnstad said on Tuesday. Arnstad said she would use the meeting to sound out other producers and get views from consumer groups before making any decision on the cut. "We will use the opportunities in South Africa to get an increased understanding of what the opinions are in other producing countries and to get an overall picture of the interests of different groups and different countries," Arnstad told Reuters in an interview. "We will use that knowledge in our judgement when we come back," she said. Norway imposed a 100,000 bpd cut to crude output on May 1 in line with moves by other producing countries, both OPEC and non-OPEC, to try and bolster languishing prices by reducing supply from the glutted market. The reduction runs until the end of the year. Inspite of the cut, however, Norway has failed to meet its production projections for 1998 which have been downgraded to an average 2.97 million bpd compared with original forecasts of 3.15 million bpd including the cut. The government's 1999 draft budget predicts Norwegian output rising to 3.4 million bpd, excluding any self-imposed limitation. Arnstad said the ministry hoped to have new forecasts for production and investment on the Norwegian continental shelf in January. She said that as well as the main conference in Cape Town between October 29-31, she also hoped to have bilateral meetings with major producers such as Britain, Mexico, Venezuela and Kuwait. She said she also hoped to discuss the international economic situation, especially in the Asia region, and the European gas markets. "One issue that should be addressed by the main conference is the implication of the increased globalisation of the (energy) industry, including the environment and human rights," Arnstad said. Nigeria reassures oil firms on investment safety LAGOS, Oct 27 - Nigeria's military government on Tuesday met with chief executives of oil multinationals to reassure them of the safety of their investments in the country's troubled oil region, state radio said. Radio Nigeria said the meeting in the capital Abuja was between Rear Admiral Mike Akhigbe, deputy to military ruler General Abdulsalami Abubakar, and the chief executives of six oil majors in joint ventures with the government. "He (Akhigbe) said the government was deeply concerned about the state of security in some oil producing areas and had taken adequate steps to protect lives and property," the radio said. It added that the meeting also discussed plans by the government to restructure "the investment pattern" in Nigeria's oil and gas industry but did not give further details. Nigeria holds a 57 percent average stake in joint ventures with Royal/Dutch Shell <RD.AS><SHEL.L>, Mobil Corp <MOB.N>, Chevron Corp <CHV.N>, Elf Aquitaine <ELFA.PA>, Texaco Inc <TX.N> and Agip SpA [AGIS.CN]. Armed ethnic Ijaw youths demanding amenities and more say in government have shut in a third of Nigeria's oil output of some two million barrels per day (bpd) for over three weeks. The affected facilities are those of Shell and Chevron. The closures are part of an upsurge of unrest in Nigeria's main oil-producing Niger Delta, where impoverished locals accuse the government and oil multinationals of depriving them of the oil wealth pumped from their land. Ethnic clashes have also erupted in the past week between Ijaws and Itsekiris in the oil town of Warri where several oil companies have their offices, claiming at least 10 lives with 85 houses burnt. France tells Iraq to comply with U.N. rules PARIS, Oct 27 - France told Iraqi representatives on Tuesday that compliance with United Nations resolutions was the only way to secure a possible review of an international trade embargo on Baghdad. Junior foreign trade minister Jacques Dondoux reiterated France's position in talks with Iraqi Trade Minister Mohamed Medhi Saleh, who again pressed for an end to the embargo, Dondoux's office said. "During the meeting, Jacques Dondoux reminded Iraq of the necessity to comply with the resolutions of the United Nations in order to obtain an overall review of the sanctions regime," a statement from Dondoux's office said. Saleh completed a two-day visit to Paris on Tuesday, after talks with Foreign Ministry Secretary-General Loic Hennekine on Monday. The latter also urged Iraq to resume cooperating with the United Nations arms inspectors. Baghdad broke off arms inspections on Aug. 5, saying all of its weapons of mass destruction had been accounted for and further searches by the United Nations Special Commission (UNSCOM) amounted to espionage. Saleh and Dondoux also discussed the oil-for food plan with the United Nations which allows Iraq, since December 1996, to sell crude oil and use the revenue to buy food and medicines. The plan, under the auspices of U.N Resolution 986, aims to ease shortages of vital medicines due to the general embargo on trade with Baghdad since its 1990 invasion of Kuwait. Since the oil-for-food programme started, French companies rank among the main suppliers of goods to Iraq, along with Russian, Australian, U.S. and Chinese firms. Under the latest phase of a programme that is renewable on a six-monthly basis and ends on Nov. 25, Iraq is allowed to sell $5.25 billion of oil to buy goods. But Baghdad is expected to fall short of this ceiling by almost $2 billion because of the dilapidated state of its oil industry and low oil prices. Tuesday's meeting with Dondoux took place because there is uncertainty over the immediate future of the oil-for-food pact itself, a French official said. "We are currently in Phase Four (of the oil-for-food plan). The issue is to know what will happen after" the fourth phase ends, he said. "The Iraqis want to get out of the trade embargo. In their mind, they do not want an extension of Phase Four or a Phase F Five," the official said. 10/28 01:46 Kuwait for more oil output cuts to balance market KUWAIT, Oct 28 - Kuwait appears set to demand a third round of oil output cuts when it consults with oil producers on Wednesday on steps needed to boost world crude prices. "Let us see what is the point of view of the brothers ... but there must be seriousness on this issue," Kuwait Oil Minister Sheikh Saud Nasser al-Sabah said before flying to South Africa where he will meet OPEC and non-OPEC counterparts. When asked if producers had any other option but a third round of cuts to achieve the target price of $17 for a barrel of benchmark Brent, the hawkish minister said: "We tried cuts and the price is still low ... let us see what other options the brothers might have." Sheikh Saud told Reuters on Tuesday that world markets were still oversupplied and vowed to support a third round of cuts. "The bottom line of this whole thing is that there is too much oil in the market...If it takes a cut in production to improve prices, we are for it. "Cutting production should not be limited to OPEC members only. Non-OPEC (members) should also comply and cooperate with any decision taken by us," he added. The Kuwaiti minister, whose country currently has an OPEC quota of 1.98 million barrels per day (bpd), has repeatedly said that for Kuwait it was a matter of price and not output volume. Brent at around $13 a barrel is some $6 below last year's average, a situation dominating the build-up to this week's Cape Town informal gathering of ministers from about 50 major oil producing and consuming nations. Sheikh Saud said on Tuesday: "It is not just our target. It is the target of every member of OPEC. When we decided to cut (production) last June our expectation were that (by November) crude would reach $17 provided every body (complied with pledged) cuts. "This is something shared by everyone and this was the target and the reason for the cuts," he added. "The prices today are absolutely unacceptable to everyone." But prices dropped further on Tuesday as traders concluded that the talks between OPEC and non-OPEC states offered little prospect of more output cuts. Earlier this month, Kuwait warned other oil exporters of a production war if they failed to comply with already pledged cuts, adding that Gulf Arab allies could flood the market. Kuwait, which controls just under 10 percent of proven world oil reserves, has so far this year cut its production by 225,000 bpd as part of two collective accords to reduce supply to world markets by 3.1 million bpd. 10/28 02:11 Kuwait oil minister assures MPs on foreign firms KUWAIT, Oct 28 (Reuters) - Kuwait Oil Minister Sheikh Saud Nasser al-Sabah said on Wednesday he has assured parliament that it would be consulted before opening lucrative oil upstream operations to foreign companies. The sheikh said he stressed to sceptical MPs that state- owned Kuwait Petroleum Corp (KPC) was in no way planning to conclude production sharing deals with international oil majors which would be in clear violation of the constitution. "I explained to them the whole issue and it seems there was a misunderstanding that what we are planning was production sharing and I explained to them that it was completely far away from that," the minister told reporters. On Sunday leading Kuwaiti parliamentarians, led by Speaker Ahmad al-Saadoun, presented a draft law aimed at controlling moves to open the oil sector to foreign firms, demanding a crucial say in the major policy switch. It seeks to oblige the government not to sign deals until after a law is issued governing foreign investment in oil fields, setting state rights, foreign investor obligations, the method of picking a foreign investor and the duration of the investment. An explanatory note said the law "further protects public funds and prevents the possibility of violations when exploiting natural resources by foreign investors..." After parliament reconvened on Tuesday following a summer recess, Sheikh Saud met with Saadoun and other MPs to explain KPC's plans on the foreign role. "I was clear and there were more clarifications... There was a perception that we were going to sign and ready but we are heading towards presenting our plans to all the companies which are ready to cooperate with us and we will listen to them according to our conditions and not their conditions," he said. Sheikh Saud said he felt the MPs were assured. "...Anyway we welcome the draft law although I have not reviewed it in detail and what is meant by it. "We will discuss and study this issue together when I return and we will not take a decision on this before I return," the minister said before leaving for South Africa. "I have asked for a meeting with (parliament's) Finance Committee to explain our plan and the steps we will take." Parliament has in the past issued recommendations to the government not to sign any upstream oil deals before consulting it but the MPs are now seeking a stronger obligation. Sheikh Saud has repeatedly said that any upstream deals would not include a production sharing formula. Some of the world's largest oil firms have been waiting in the wings for years with small technical agreements with Kuwait. International hopes for a role in Kuwait's upstream operations, including oil fields close to the northern border with former occupier Iraq, were renewed last year when the Supreme Petroleum Council gave approval in principle to foreign participation. At current production levels of just under two million barrels per day, Kuwait's oil reserves, about 10 percent of proven world reserves, would last more than 100 years. Kuwait had earlier announced plans to raise production capacity by one million bpd early in the next century from a current 2.5 million bpd, a project which experts say requires foreign participation to secure needed technology. In the explanatory note to the draft law, the MPs also said the government would be unable to renew concession rights with Japan's Arabian Oil Co Ltd <1603.T> in the border Neutral Zone shared by Saudi Arabia and Kuwait without referring it first to parliament.

To: Kerm Yerman who wrote (13012)	10/28/1998 10:10:00 AM
From: Kerm Yerman	Respond to of 15196

OIL AND NATURAL GAS SCENE - WEDNESDAY 10/28/98 - PART 2 10/28 02:28 FOCUS-Kuwait says other states favour oil cuts too KUWAIT, Oct 28 - Kuwait appears set to demand a third round of oil output cuts when it consults oil producers on Wednesday on steps needed to boost world crude prices. "Let us see what is the point of view of the brothers ... but there must be seriousness on this issue," Kuwait Oil Minister Sheikh Saud Nasser al-Sabah said before flying to South Africa where he will meet OPEC and non-OPEC counterparts. When asked if producers had any option but a third round of cuts to achieve the target price of $17 for a barrel of benchmark Brent, the hawkish minister said: "I believe there is an inclination towards that (cuts) and there is a desire for it... We tried cuts and the price is still low... Let us see what other options the brothers might have." Sheikh Saud told Reuters on Tuesday that world markets were still oversupplied and vowed to support a third round of cuts. "The bottom line of this whole thing is that there is too much oil in the market... If it takes a cut in production to improve prices, we are for it. "Cutting production should not be limited to OPEC members only. Non-OPEC (members) should also comply and cooperate with any decision taken by us," he added. The Kuwaiti minister, whose country currently has an OPEC quota of 1.98 million barrels per day (bpd), has repeatedly said that for Kuwait it was a matter of price and not output volume. Brent at around $13 a barrel is some $6 below last year's average, a situation dominating the build-up to this week's Cape Town informal gathering of ministers from about 50 major oil producing and consuming nations. Sheikh Saud said on Tuesday: "It is not just our target. It is the target of every member of OPEC. When we decided to cut (production) last June our expectations were that (by November) crude would reach $17, provided everybody cuts. "This is something shared by everyone and this was the target and the reason for the cuts," he added. "The prices today are absolutely unacceptable to everyone." But prices dropped further on Tuesday as traders concluded that the talks between OPEC and non-OPEC states offered little prospect of more output cuts. Earlier this month, Kuwait warned other oil exporters of a production war if they failed to comply with already pledged cuts, adding that Gulf Arab allies could flood the market. Kuwait, which controls just under 10 percent of proven world oil reserves, has so far this year cut its production by 225,000 bpd as part of two collective accords to reduce supply to world markets by 3.1 million bpd. 10/28 09:02 Norway N.Sea oil loadings return to normal OSLO, Oct 28 - Shuttle tanker loadings of crude oil at the North Sea Gullafks and Statfjord fields were running normally on Wednesday, operator Statoil [STAT.CN] said. Loadings were resumed after a stoppage of just over 10 hours, Statoil said. Production at the fields was not disrupted by the delays. The two developments together produce and process around 900,000 barrels per day of oil. OPEC Oil Prices Continue to Drop VIENNA (Oct. 27) XINHUA - The average price of the Organization of Petroleum Exporting Countries' seven crudes plunged to 11.72 U.S. dollars per barrel last week, 24 U.S. cents lower than the previous week, the Vienna-based OPEC Secretariat said Tuesday. Statistics showed the average oil price in September dropped to 12.91 dollars per barrel, while that of last year was 18.68 dollars per barrel. The organization has set the benchmark price of oil per barrel at 21 dollars. OPEC had expected an obvious price rise in the world crude market in October, but no miracle had taken place ever since. This year a number of countries have witnessed economic depression or financial crisis, which resulted in a cut in their domestic demand of crudes. Some oil exporting countries have attempted to increase oil exports to offset the loss in revenues. Although OPEC had twice made decisions on limiting oil output of its member states this year, the efforts failed to stablize the oil market and pop up the prices. OPEC groups Algeria, Indonesia, Iran, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. 10/27 16:25 Oil slips as Saudi lambasts OPEC cheats LONDON, Oct 27 - Oil prices ended weak on Tuesday as traders concluded that an imminent OPEC gathering offered little prospect of more output cuts. International benchmark Brent shed early gains and was last trading eight cents down at $12.96. Prices are still more than $6 below last year's average, a situation dominating the build-up to this week's Cape Town informal gathering of ministers from about 50 major oil producing and consuming nations. OPEC kingpin Saudi Arabia dampened expectations of further action to boost prices with its sharpest call yet for the export cartel to comply fully with 2.6 million barrels per day (bpd) of supply sacrifices already promised. Qatari Oil Minister Abdullah bin Hamad al-Attiyah, on arrival for the meeting at Cape Town said he did not expect OPEC ministers to reach any decision on cutting oil production at the oil conference Saudi Crown Prince Abdullah, in a rare public statement, said other OPEC nations were to blame for the sustained oil price depression as they had failed to live up to agreements on supply cuts. "There were decisions by OPEC which would have maintained the oil prices had everybody kept to them," the Crown Prince, heir to the Saudi throne, said in an interview with Saudi al-Riyadh newspaper. "But unfortunately there are some brothers in OPEC who did not abide by these decision." Market analysts said the Saudi warning appeared to all but extinguish the prospects of any serious discussion in Cape Town of further output reductions. "If they're saying they haven't met their existing cuts it doesn't make sense to me that they would cut further," said Mehdi Varzi at Dresdner Kleinwort Benson. Yet Kuwait oil minister Sheikh Saud Nasser al-Sabah on Tuesday vowed to support further production cuts on top of the austerity measures pledged so far. "There is too much oil in the market...If it takes to improve prices a cut in production, we are for it," Sheikh Saud told Reuters as he prepared to head for Cape Town. Venezuelan oil minister Erwin Arrieta said he was likely to meet in Cape Town with ministers from Saudi Arabia and Mexico. Those three engineered this year's producer cut package. The early price gains were underpinned by fears that powerful Hurricane Mitch, currently prowling the coast of central America, could disrupt oil output. In late September, Hurricane Georges ravaged through the Caribbean Islands before pummelling oil facilities in the Gulf of Mexico and the U.S. Gulf Coast. 10/27 16:29 NYMEX crude ends off lows; stockbuild seen in APIs NEW YORK, Oct 27 - December crude on the New York Mercantile Exchange recovered a bit but still ended on the negative side Tuesday after profit-takers pushed it down, amid forecasts of a weekly crude stockbuild, traders said. The December crude contract lost 10 cents as it settled at $14.13 a barrel. It bounced from $13.90 where it slumped early afternoon after profit-takers moved in, erasing an early gain of 35 cents to an intraday high at $14.58. November heating oil and gasoline, which will expire on Friday, reversed early gains and also ended on the losing side. November heating oil ended at 38.79 cents a gallon, down 0.37 cent. It traded between 38.45/39.90 cents. Front-month gasoline finished at 44.14 cents a gallon, off 0.34 cent, way below its 45.15-cents-a-gallon session high. The contract traded as low as 43.65 cents on Tuesday. In London, December Brent on the International Petroleum Exchange (IPE) settled at $12.96 a barrel, down eight cents, after edging up from an intraday low of $12.72. NYMEX front-month crude surged early to $14.58 on a combination of short covering and talk about powerful Hurricane Mitch, which, though days away from landfall and far from oil-producing areas, reminded traders of possible production disruptions, as happened in September. That month, a series of powerful storms swept through the Gulf of Mexico and caused production shut-ins and then moved into Gulf Coast states, forcing refinery shutdowns. News that OPEC members would discuss steps to boost oil prices at the sidelines of an international energy conference starting Friday in Cape Town, South Africa, backed the day's early surge, continuing a supportive effect from Monday. But some analysts said they had limited expectations of the meeting, particularly on hype about a possible discussion by the group of a further output cut to help lift oil prices. They noted that despite Kuwait's insistent backing of a third round of cuts to push up oil prices -- if Brent crude does not rise to $17 a barrel by OPEC's Nov. 25 meeting -- there is as yet no consensus among OPEC's members for any further reduction. "In the first place, they (OPEC members) will have to fully comply with their agreements," said an NYMEX oil analyst. Earlier Tuesday, Saudi Crown Prince Abdullah said some OPEC members were to blame for the sustained oil-price depression as they had failed to live up to agreements on supply cuts reached earlier this year. Analysts believe this signalled that there would be no serious discussion of further output cuts at the informal meeting of OPEC ministers in Cape Town. "The best they can hope for at this gathering is to get the cooperation among (OPEC) members and send a clear message that they are going to adhere to previous cuts," said Cresvale International analyst Tom Bentz. "If they can get assurances that members will hold the line on output or get some non-OPEC producers to do the same, that's all they can hope for and that could set the groundwork for the November meeting," Bentz added. Meanwhile, predictions of another build in U.S. crude stocks were bearish for the market, traders said. Crude inventories nationwide were expected to show a build of 4.0 million barrels for the week ended Oct. 23, "correcting" from a small draw reported by the API for the previous week, traders and analysts told Reuters in a poll. They also forecast a slim, 1.0-million-barrel draw in gasoline stocks and a low, 500,000-barrel build in distillates, which include heating and diesel oil. A small increase of 1.5 percentage points in refinery runs was expected as more refineries have completed their scheduled maintenance at this period. 10/27 14:05 Final data raise US Aug oil imports by 8 mln bbls WASHINGTON, Oct 27 - The United States imported almost eight million more barrels of oil during August than previously thought, with more crude coming from Saudi Arabia, Venezuela, Iraq and Kuwait, based on final volume numbers compiled by the U.S. Energy Information Administration. The United States imported 283.435 million barrels of oil in August, up from preliminary estimates of 275.442 million barrels, said the EIA, the statistical arm of the Department of Energy. The higher number was due in part to final data from Chevron Corp. <CHV.N>, showing the company imported more oil that expected, an EIA official told Reuters on Tuesday. Additional crude imports from Saudi Arabia, Venezuela, Iraq and Kuwait accounted for most of the overall increase. These numbers confirm the fears of Americans, highlighted in a new poll released last Wednesday -- in connection with the 25th anniversary of the Arab oil embargo. That poll, by the Sustainable Energy Coalition, found that eight out of 10 Americans believe that U.S. dependence on foreign oil is a security risk, and they want the federal government to require better gasoline mileage for cars. On Oct. 17, 1973, Saudi Arabia's King Faisal sanctioned the embargo to punish the West for its support of Israel in the Arab-Israeli war that began on Yom Kippur, 11 days earlier. In the EIA's latest report, the final August tally for oil shipments to the U.S. from Saudi Arabia was 45.499 million barrels -- way up from preliminary estimates of 42.189 million barrels. Venezuela's final crude shipments totaled 41.816 million barrels, up from earlier projections of 40.967 million barrels, the EIA said. U.S. oil imports from Iraq were put at 22.093 million barrels for August, much higher than the 20.275 million barrels the EIA previously thought was imported. Kuwait's shipments were also increased to 8.461 million barrels, up from earlier estimates of 7.470 million barrels, according to the EIA. Crude imports from Ecuador were raised slightly to 4.887 million barrels from 4.544 million barrels, EIA data showed. But oil shipments to the United States from its two closest neighbors remained steady with earlier EIA estimates: -- The final number for Mexico's August oil shipments was unchanged from the preliminary estimate of 35.297 million barrels. -- Crude imports from Canada were also unchanged at 38.691 million barrels. 10/27 16:31 U.S. Cash Crude - Sour supported, sweet slides NEW YORK, Oct 27 - U.S. cash crude prices seesawed Tuesday, starting the day on a bullish note before trailing lower on a late burst of selling, dealers said. The December futures contract on the New York Mercantile Exchange (NYMEX) was also taken on a roller-coaster ride Tuesday. After hitting a session high of $14.58 a barrel, the contract settled down 10 cents at $14.13 a barrel before the release of the American Petroleum Institute stock figures Tuesday evening. U.S. traders and analysts polled earlier in the day said they expected to see a crude stockbuild of about four million barrels for the week of October 23. In the cash crude market, sweet crude differentials followed a similar course, with early gains in the Light Louisiana Sweet/St. James market evaporating by the close. The losses came even as OPEC ministers prepared to meet later this week on the sidelines of an energy conference in Cape Town, South Africa. Mexican Energy Minister Luis Tellez threw cold water on hopes of more production cuts coming out of the talks when he said Monday that discussions would focus on compliance rather than new supply sacrifices. But Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah offered a different view on Tuesday, vowing to support a third round of cuts from the cartel. U.S. traders also have an eye fixed on a fierce hurricane swelling in the Caribbean. On Monday, Mexican oil company Petroleos Mexicanos brought 80 percent of its offshore staff in the Campeche Sound to shore ahead of Hurricane Mitch. Already, concerns that supply could be interrupted by the storm have boosted U.S. sour crudes. West Texas Sour/Midland was talked between $1.51 and $1.47 below benchmark West Texas Intermediate/Cushing late Tuesday, up a dime from where closed Monday. Traders had it changing hands at discounts of $1.52, $1.50, and $1.48 a barrel. LLS/St. James also looked set to make solid gains Tuesday, starting the day by jumping a nickel to trade 10 cents below the benchmark. But dealers said it subsequently fell back to minus 17/15 cents as Dated Brent prices were slashed in Europe, raising the possibility of North Sea crude sales to the Gulf Coast. In other trade, Heavy Louisiana Sweet/Empire was quoted around 40 cents below the benchmark on Tuesday. Eugene Island was assessed between minus $1.10 and $1.00 a barrel, and Bonito hovered about 85 cents under the benchmark. 10/27 16:56 U.S. spot products-Gulf mogas slips on offers NEW YORK, Oct 27 - U.S. Gulf Coast gasoline pared its previous day's gains by late Tuesday under scheduling pressure, but trade was dull ahead of the weekly inventories reports, traders said. "It is inventory day," a trader said. Trade in the New York Harbor was also lackluster but differentials held onto its earlier gains in wait for clearer direction on Hurricane Mitch and this week's OPEC meet. For the American Petroleum Institute's (API) report for the week ended October 23, due out late Tuesday, market analysts/traders forecast a slim 1.0 million barrel draw in gasoline to 199.3 million barrels and a low 500,000-barrel build in distillates to 147.1 million. But on gasoline, the API data could still go either way, depending on demand, some said. If imports are down and demand steady there could be a small draw, but the opposite could produce a small build. Crude inventories nationwide were expected to show a build of 4.0 million barrels to 328 million, "correcting" from a small draw reported for the previous week. A small increase of 1.5 percentage points in refinery runs was expected as more refineries have ended their scheduled maintenance at this period. The expected crude build kept the December crude contract on the New York Mercantile Exchange lower, settling 10 cents per barrel down at $14.13. November heating oil and gasoline, which will expire on Friday, reversed early gains and also ended on the losing side. November heating oil ended at 38.79 cents a gallon, down 0.37 cent, December down 0.41 at 39.84. Front-month gasoline finished at 44.14 cents a gallon, off 0.34 cent and December shed 0.43 cent at 43.57 cents. GULF COAST Conventional gasoline shed its early day's half cent gain as the markets shrugged off any impact of the fire at Amoco's 433,000 barrel-per-day (bpd) Texas City, Texas, refinery last week and as sellers emerged ahead of scheduling. Front 31 cycle of regular M4 and premium V4 conventional gasoline schedules later Tuesday on the Colonial Pipeline. Prompt M4 was last pegged at a 4.00 cents discount to the print after trading in the morning at at a 3.50-3.40 discount to the December NYMEX. Prompt V4 traded at 3.55 to 3.35 cents over the M4. Jet fuel which also schedules its front 31 cycle held steady however, with the 54-grade pegged at a 1.25/1.50 cent premium over the December NYMEX, and the 55-grade at around 2.20 cents over. The rest of the market was dull ahead of the weekly stock data and Thursday's OPEC meeting in South Africa, traders said. The reformulated and premium grades were assessed unchanged with the RFG A-grade at a 2.00/1.75 cent regrade to the M-grade and D-grade premium RFGs around 2.25 cents over the print. On the distillates, diesel traded at a 0.25 cent discount to the screen while no heating oil trade was reported leaving levels steady at a 2.50/2.25 cents discount. NEW YORK HARBOR Diferentials were mostly steady ahead of the release of the weekly stock data, traders said. Heating oil kept morning gains that were made on sustained buying interest as players looked to take advantage of the steep NYMEX contango, traders said. Prompt heat was steady at 0.55/0.30 under the December screen and trades were reported at 0.35 cent under. By afternoon, NYMEX December heat futures were running 1.05 cent firmer than November heat futures, a gain of about 0.10 cent on the day. Low sulphur diesel differentials, however, gave up 0.25 cent and were pegged at 1.25/1.50 cent under the screen. Jet 54 gained 0.25 cent to be pegged at 5.40/5.65 cents over and jet 55 grade was steady in thin trade. Prompt M4 gasoline held gains, despite the full return of Sun Co.'s crude distillation unit and reformer at the Philadelphia refinery early this week. Prompt M4 rose was assessed at 0.60/0.40 under the screen and traded at 0.50 under. Traders said gasoline was strong because of market sentiment that there will not be much of a Habor gasoline build in the weekly data because of short supply of gasoline feedstocks. Regular reformulated gasoline, the A4 Grade, held Monday's 20 point gain and was pegged at 0.35/0.70 cents over the NYMEX, in thin trade. A8 traded at 1.50 over the screen for barges. The premium D2 reformulated gasoline was pegged 0.25 firmer at 3.50/3.75 over the December screen. MIDCONTINENT Low sulphur diesel differentials in Group Three were 0.25 cent firmer on early day buying, traders said. Around 50,000 of October barrels were bought by a refiner, they said, at 3.25 premium after lackluster trade on Monday. The interest in Group gasoline however disappeared and regular unleaded was pegged steady at 3.00/2.75 cents under the print and premium was at a 3.50 cent regrade. In Chicago, regular gasoline was firmer on hurricane and the upcoming OPEC meet with bids for November supplies at 3.15 cents discount. Low sulphur diesel in Chicago extended its weak tone, with November supplies traded at 1.00 cent over the screen.

To: Kerm Yerman who wrote (13012)	10/28/1998 10:18:00 AM
From: Kerm Yerman	Respond to of 15196

OIL AND NATURAL GAS SCENE - WEDNESDAY 10/28/98 - PART 3 10/27 17:24 North Sea December Brent up 14 cents in U.S. NEW YORK, Oct 27 - North Sea Brent gained a hearty 14 cents late Tuesday in the United States aftermarket, traders said. December Brent was valued at about $13.12 a barrel, up from its close at $12.96 earlier Tuesday on the International Petroleum Exchange. Two full cargoes of December cash Brent traded at $13.13 in the aftermarket. A third full cargo, of 500 lots, was traded at $13.10 per barrel. A 200-lot cargo was done at $13.085 and another 200-lot cargo was traded for $13.13 per barrel. The Brent November-December spread on Tuesday traded at minus 60 cents, after being done at minus 54 cents on Monday. The Brent December-January spread was done on Tuesday at minus 16 cents after being done at minus 15 cents on Monday. 10/27 17:34 US foreign crude - Fear of missing Mexican crude NEW YORK, Oct 27 - The length of the shutdown of Mexico's largest oil port Caya Arcas will go a long way in determining the value of a variety of crude oils shipped to the United States in the coming weeks, traders said. State oil monopoly Pemex on Tuesday said that exports were still shipping out of its other two ports. "That the closing will have an impact is easy to see," said one trader of Latin American crudes to the U.S. "Obviously, it will have a very positive effect (raising prices of other crudes) so people should know what they need if they are on line for any Isthmus or Maya," he said. Maya and Isthmus, in that order, are the two most popular Mexican export grades. Pemex was also expected to shut-in some production, but as of late Tuesday, there were no hard numbers from the state oil monopoly. Allocations of Venezuelan crude oil to U.S. refiner Lyondell-Citgo Refining Company Ltd. (LCR) has since August been cut by approximately 10 percent due to the cutbacks in Venezuelan crude production, Lyondell Chemical Company <LYO.N> said on Tuesday. Its partner Citgo Petroleum Corp. is owned by PDV America Inc, a subsidiary of state owned Petroleos de Venezuela SA (PDVSA). "Beginning in August, LCR began to receive reduced allocations of crude oil from PDVSA due to the announced cutbacks in crude oil production in Venezuela. Allocations have been reduced by approximately 10 percent relative to the Crude Supply Agreement," the statement said. The collapse of Asian oil demand spurred a series of world production cuts to shore up flagging prices. Venezuela agreed since April to slash about 16 percent or 525,000 barrels per day of its production of 3.4 million barrels per day (bpd). LCR processed an average of 267,000 bpd in the third quarter of 1998 compared to 245,000 bpd in the second quarter and 217,000 bpd in the third quarter of 1997. In market news from Colombia, traders said the state oil company Ecopetrol delayed tenders for 1.1 million-barrel shipments. An Ecopetrol tender for Cano Limon was heard awarded last week at a discount of around $2.29 under WTI, but traders said the medium heavy crude was at least 20 cents weaker than that now. Venezuelan Mesa Furrial was done at WTI minus $2.32 last week but a trader said that it was closer to WTI minus $2.60 this week. Traders said that Vietnamese Bach Ho crude was on the water with the sellers awaiting bids. Traders said that November arrival barrels of Ecuador's sour crude, Oriente were being offered into the U.S. Gulf at $2.60 under WTI. But most of the Oriente entering the United States heads for California, where it is notionally valued at a discount of about $2.10/$2.15 from WTI. Colombia is also shopping around a Vasconia shipment for loading November 25-29. The bids are due for the tenders this week. The last heard done for that crude to the U.S. was WTI minus $2.80. But another trader said another deal was done around $2.70 below WTI. 10/27 20:35 U.S. West Coast crude market steady LOS ANGELES, Oct 27 - U.S. West Coast crude oil differentials were flat on Tuesday while absolute prices fell with lower NYMEX futures. With differentials unchanged, pure Alaska North Slope (ANS) crude prices posted losses along with NYMEX December crude oil futures. West Coast spot crude markets were idle, with three cargoes sold earlier this month and at least two remaining buyers looking to push the November ANS differential as wide as $1.50 under WTI. The last ANS deal was struck Oct. 9 at a discount of $1.025 a barrel off benchmark U.S. crude, November West Texas Intermediate (WTI). Buyers claimed that adequate production and spot foreign cargoes were discouraging them from buying ANS this week. The notional price for West Coast ANS fell to $13.08/13.24 a barrel from $13.28/13.45. The biggest ANS producer said his company had November cargoes available but declined to make a specific offer to refiners. Two refiners offered cargoes for November and/or December delivery, buyers said. In foreign crudes, three cargoes of Oriente, an ANS substitute, were reportedly sold at undisclosed prices by two Gulf Coast trading houses and a West Coast refinery. A cargo of Kuwaiti was sold between two West Coast refineries, but neither was available to confirm the deal. In the Northwest U.S., a independent refiner bought a cargo of Brent at an undisclosed price. Trade for California crude remained stagnant. 10/27 21:40 ACCESS U.S crude futures fall after supplies rise LOS ANGELES, Oct 27 - U.S. December crude oil futures prices fell amid moderately busy after-hours trade Tuesday after a large rise in crude oil inventories was reported. By 1820 PDT, December crude oil traded at $14.05 a barrel on ACCESS, off eight cents from its NYMEX close of $14.13 where it finished 10 cents a barrel lower in anticipation of the report. The report is released weekly by the American Petroleum Institute (API). API data released late Tuesday showed U.S. crude stocks up by nearly eight million barrels last week. "The crude number is pretty high," one ACCESS trader said. "API's are bearish." December crude volume was a moderately heavy 1,553 for all months and 1,006 lots for December on ACCESS. Gasoline and heating oil, in turn, fell because of the crude oil glut. November unleaded gasoline traded 43.95 cent a gallon on ACCESS, down 0.19 cent with 94 lots exchanged for all months and 79 in November. November heating oil traded 99 lots total, with 59 changing hands in November. The contract price fell 0.09 cent a gallon to 38.70 cents on ACCESS. NYMEX natural gas ends down sharply as storm fears fade NEW YORK, Oct 27 - NYMEX natural gas futures ended down sharply Tuesday in active trade, pressured by mild weather this week that has softened the cash and fading fears Hurricane Mitch will threaten U.S. Gulf gas production, sources said. November slumped 19 cents to close at $2.108 per million British thermal units after trading today in a range between $2.10 and $2.318. December settled 20.4 cents lower at $2.371. Other deferreds ended down 1.8 to 15 cents. ''Mitch was headed west, but was expected to turn north and didn't. When the cash couldn't hold, the funds were on the run,'' said one Midwest trader, adding funds really bailed once December broke its 40-day moving average in the $2.46 area. At 1600 EST, Mitch was about 90 miles north of the Honduras coast, moving west-southwest at six mph with maximum sustained winds of 155 mph. Hurricane warnings are in effect for Belize, Mexico's Yucatan Peninsula and the Caribbean coasts of Honduras and Guatemala. While Mitch's path was not certain, traders said its current track seemed less likely to threaten U.S. Gulf gas production. In the meantime, traders said soft cash and mild weather could put further pressure on November ahead of its expiry tomorrow though few expected the spot month to dive below $2. ''This market is range bound, and there are strong boundaries. I wouldn't get married to the bear side just yet, especially below $2. At some point, we're going to get some (cold) weather,'' a New York-based trader said. Injection estimates for Wednesday's weekly AGA storage report range from 25 bcf to 60 bcf. For the same week last year, stocks gained 29 bcf. WSC expects the Northeast and Mid-atlantic to warm to several degrees F above normal at midweek before cooling to normal or three degrees below normal Friday and Saturday. The Southeast and Florida will range from seasonal to several degrees above seasonal through Saturday. In the Midwest, above to much-above normal midweek readings will cool to within several degrees of normal by the weekend. Texas will average two to four degrees above normal for the period, while the Southwest mostly will stay two to eight degrees below normal. Chart traders pegged key November support at $2.03, with resistance seen at Monday's $2.335 high and then at $2.40. But with November set to expire tomorrow, traders turned their attention to December, which also broke some key support points today. With the $2.41 double bottom breached this morning, major support was now pegged at the October low of $2.30. Resistance was seen first at Monday's high of $2.63 and then at the September highs in the $2.715 area. In the cash Tuesday, Gulf Coast swing quotes on average slipped more than a nickel to the $1.80 area. Midwest pipes were down a similar amount to about the $1.70 level. In the West, El Paso Permian lost three cents to about $1.80. Gas at the Chicago city gate was two to three cents lower in the low-$1.90s, while New York fell a similar amount to the low-teens. The NYMEX 12-month Henry Hub strip skidded 8.2 cents to $2.259. NYMEX said an estimated 132,442 Hub contracts traded today, up from Monday's revised tally of 114,914. U.S. spot natural gas prices mostly softer on weak demand NEW YORK, Oct 27 - U.S. spot natural gas prices slumped lower Tuesday, pressured by mild weather and ample supplies, industry sources said. Also, Hurricane Mitch did not turn in a more northerly direction as was previously expected. It is now expected to continue a slow west-southwest to west motion for the next 24 hours, the National Hurricane Center said. "While there is a one in four chance that this storm will get into the Pacific, the more likely scenario is that it will get into the Gulf and then recurve, and could impact the U.S. in 5-6 days (the Gulf Coast east of 90 may wind up being the most likely candidate," Accu-Weather said this afternoon. Swing gas prices at Henry Hub were quoted about six or seven cents lower in the mid-$1.80s per mmBtu, with NYMEX's November contract seen sliding to a low of $2.105. In the Midcontinent, prices slipped five cents to mostly trade in the low-$1.70s, while Chicago city-gate prices were quoted at $1.90-1.94. In west Texas, El Paso Permian and Waha gas traded at $1.77-1.81, while the San Juan market was also seen a little lower at $1.64-1.71. However, the outage on the San Juan lateral supported prices at the Southern California border, where deals were reported done at $2.42-2.47. The outage, affecting about 625 million cubic feet per day (mmcfd) of gas out of a total of 800 mmcfd, is expected to last through Friday. The San Juan lateral runs from Ignacio, Colo., to Blanco, N.M. On the East Coast, New York city-gate prices rebounded to about $2.10-2.15, while the Appalachian market continued to tack on gains to land at $2.24-2.32. Preliminary injection estimates for Wednesday's American Gas Association storage report were 30-60 bcf. Canadian spot natural gas prices extend losses in Alberta NEW YORK, Oct 27 - Spot Canadian natural gas prices in Alberta were lower on average Tuesday as gas supplies flooded the market and temperatures lent little demand to the region, industry sources said. Linepack on NOVA as of Monday evening posted another gain following a weekend of heavy packing at 13.364 billion cubic feet per day (bcfd), up from 13.318 bcfd on Sunday and from the pipeline's target of 12.8 bcfd. As a result, gas at the AECO storage hub in Alberta traded at C$1.35-1.65 per gigajoule (GJ), dropping another 24 cents from Monday's average level. Most recent quotes were heard in the high-C$1.50s per GJ. November AECO was talked at C$2.66. Despite a two-day decline of about C$1 per GJ, most sources said they were anticipating prices to rebound on Wednesday, possibly over C$2, due to the increase in border demand and heavy drafting on NOVA's system. In the other western markets, prices were also lower, with Sumas / Huntingdon prices talked around US$1.65 per million British thermal units (mmBtu). To the east, a decline in the futures market pushed Niagara export prices about eight cents lower to about US$1.92-1.93 per mmBtu. 10/27 16:41 U.S. average gasoline price drops to $1.015 per gallon, DOE says WASHINGTON, Oct 27 - The national retail price for gasoline fell to $1.015 a gallon, dropping for the second week in a row, the U.S. Department of Energy said. Based on its survey of 800 stations, the DOE said the cash price for gasoline at the pump dropped four-tenths of a cent from last week's $1.019 a gallon. Gasoline prices are also way down from about $1.18 per gallon a year ago. The DOE is forecasting the average price for unleaded gasoline during the fourth quarter will average $1.04 a gallon. 10/28 00:26 US Products Outlook - OPEC, Mitch support sought NEW YORK, Oct 26 - The return of U.S. refineries from autumn turnarounds continued to bear down on the outlook for oil products, but some bullish traders looked to the meeting in South Africa this week of OPEC producers, Hurricane Mitch and weakening refining margins for support. Sun Co. Inc. <SUN.N> restarted its 177,000 barrel-per-day (bpd) crude distillation unit at its Philadelphia refinery on Sunday, just part of around 430,000 bpd of production to return from maintenance shutdowns in the past week. "The weekly American Petroleum Institute (AP) should show higher refinery runs...nothing else is very certain, so they'll be watched closely," said an analyst. With the exception of heating oil prices in New York Harbor, both gasoline and distillates fell last week with Gulf gasoline registering the largest drop of 2.20 cents per gallon to 39.40 cents. "Refineries coming back can only add to gasoline's glut," said one Harbor trader, although he added that short supplies of blending components for gasoline could limit builds in the API stock numbers to be released late on Tuesday. Distillates in the Northeast were supported as traders with storage took advantage of the contango in the market to buy the cheaper prompt supplies of the heating fuel, lifting outright prices by over a penny to around 38 cents per gallon. But lower product prices on the Gulf Coast in the last 15 days have cut refining margins in half to 28 cents per barrel of benchmark West Texas Intermediate crude processed, according to Reuters' calculations, based on standard product yields. "Cracks look awfully cheap, especially on the prompt No.2 oil," a trader said. "I don't see any appreciable rise in runs this week." Other traders were loathe to make predictions as long as there was a slight possibility that another hurricane could hit the Gulf Coast. Hurricane Mitch, one of the strongest Atlantic storms ever recorded with sustained winds of 180 miles per hour -- considered a strong Category Five hurricane -- spurred some concern in the market. But the National Hurricane Center said on Monday afternoon that Mitch, located in the western Caribbean, is not likely to reach the Gulf of Mexico. "If it stays on its current course, very little impact on oil," one analyst said. "However, it looks like Mitch is going to move very slowly and direction is unclear. One forecast has it turning north, maybe into Mexico's Gulf of Mexico waters where there is significant oil production, and quite possibly later aiming at the U.S. Gulf Coast. "Forecasters don't seem concerned yet, but this bears watching." An informal gathering of OPEC ministers later in the week on the sidelines of an energy conference in Cape Town, South Africa, was also expected to keep sellers at bay despite much skepticism on further crude production cuts. "With OPEC and Hurricane Mitch threatening, nobody is going to sell short and prices will be supported this week. But in the long term, I am bearish that the oversupply of crude is going to drag down prices," a trader said. INTERVIEW Gas to liquids viable at low oil price NEW YORK, Oct 27 - The world is awash with crude oil and prices are hovering around 25-year lows in real terms, so why invest millions of dollars in technology to convert natural gas into yet more oil? All the more so when synthetic oil's only large-scale output has been in Germany during World War II and uneconomicalproduction in oil-embargoed South Africa. Yet despite seeing its share price erode from $18 to $11 as oil prices fell, Syntroleum Corp. <SYNM.O> insists its synthetic fuels technology is becoming more, not less valuable. President Mark Agee said in an interview that as countries around the world move to banning the flaring, or burning off, natural gas, and oil companies find they simply cannot develop reserves, they will have to invest in gas to liquids (GTL). Citing USX-Marathon Group's <MRO.N> Sakhalin project in Russia, Agee said it would cost 25-30 cents per thousand cubic feet to re-inject gas into the oil field so the company can actually extract the oil. If that same gas is turned into liquids, the company starts with a $3.00 per barrel economic advantage as well as a commodity it can sell anywhere in the world. "Integrated economics which actually untraps black oil is the most likely scenario in a low price environment," he said. In Nigeria, Africa's largest oil producer, flaring is not allowed in new oil projects and the government will stop all flaring from 2010, presenting oil companies with the headache of what to do with the gas. Agee says converting Nigerian gas into oil will add one additional barrel of oil for every 10 produced and says that this process is economical. In the Alaskan North Slope alone, some 8 billion cubic feet of natural gas is re-injected, gas that Agee says could produce a huge benefit if it were converted into oil. Companies would be able to book uneconomical natural gas reserves as barrels of energy equivalent, thus reducing their finding costs per barrel as intangible natural gas becomes tangible and tradable oil. Citing figures from the U.S. Department of Energy, Agee said that global proved oil reserves are 900 billion to 1 trillion barrels, while natural gas reserves are 5,000 trillion cubic feet, of which around half is not marketable. "If you convert that at the rate of 10,000 cubic feet of gas per barrel of oil, you get another 250 billion barrels of marketable oil," Agee said, Syntroleum has a test plant running at the moment, producing two barrels of synthetic oil per day and plans a full-scale 8,000 barrel per day plant with Enron Corp in Sweetwater, Wyoming which will start up in 2001. A smaller 2,500 bpd plant, producing higher value lubricants and drilling fluids will start up earlier in partnership with Texaco and engineering firm Brown & Root, producing 2,500 bpd, Agee said. He notes that with a zero cost for natural gas, plants as small as 2,000 barrels per day could provide a reasonable return with refined product prices at $30 per barrel. Syntroleum is up against some tough competition, Exxon Corp <XON.N> is planning to use its own proprietary process in a 100,000 bpd plant in Qatar, having spent $300 million on a pilot plant at one of its U.S. refineries. Analysts estimate that Royal Dutch/Shell Group <RD.AS> has spent $1.0-$1.5 billion on its own technology. Yet neither of these will license their technology. "It is a big advantage not being Exxon or Shell. You want to license from a neutral third party and there is a whole lot of gas in the world that they do not own," Agee said. London Brent futures called to open unchanged to 5 cents lower Wed, 28 Oct 1998 04:56 EST London-Oct. 28-FWN--Energy traders here look for December Brent crude oil futures to open around unchanged to 5 cents lower from Tuesday's close. In London Tuesday, December Brent closed up 28 cents at $12.96, after trading between $12.72 and $13.38. Early NYMEX energy futures cslls: Mostly Lower Wed, 28 Oct, 07:38 EST New York-Oct. 28-FWN-- --Crude oil futures are called to open 10 cents lower. --Heating oil futures are called 15 points higher. --Unleaded gasoline futures are called 20 points lower.