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

To: marc chatman who wrote (31980)	11/20/1998 2:28:00 PM
From: articwarrior	Respond to of 95453

"If refiners are going to cut production, doesn't that mean they will be buying less crude (or building crude stockpiles to even higher levels), which in turn means there will be more downward pressure on crude prices?" Has to do with a six-month window of opportunity. It is leverage for OPEC to get cooperation from all other oil countries. The market is forward looking. With these refiners cutting production it decreases supply to final customer. The last bloody step on the rung. Japan is finally agreeing on a tax cut package, which will spur demand. Asia demand recovery steps up by 2 + months. Add to this equation Brazil's IMF shot in the arm creating more demand. Steps up demand recovery 1 - 1.5 month The recovery should be faster than original projections by almost 3- 5 months. EU will add to the demand from the Euro dollar. It will increase buying power for most of the countries involved. All three of these scenarios will provide the boost needed to reduce the over supply condition. With OPEC meetings looming and these production cuts close the pressure is on for cooperation between all third world oil producers to unite in reducing the overage and raising oil prices. Sorry so many words for such a small question. I'm sure there are counter viewpoints but this is what I see in the next six-month window. It causes me to react positively because economic forces are being brought to bear in the Oil Service favor. Opinions expressed are only that and future movement of stock cannot be based on present opinions! Good Trading