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

To: Tomas who wrote (32068)	11/24/1998 12:11:00 AM
From: Rob Shilling	Read Replies (1) \| Respond to of 95453

If the 300 million barrels of "missing" oil is phantom oil, then there is no glut. It think it was IEA that said there was a world-wide storage glut of 170 million barrels at the end of September. Subtract 300 million from that and we are at a 130 million shortfall compared to last year, in September. Also, the recent WSJ article from IEA that said oil prices will stay low in 1999, shows a 2.5 mbpd drawdown that has been occurring since September, and forecasted to continue into 1999 (but it was not pointed out, you had to do the math). Other things that have been ignored is the 200 kbpd of oil production lost in Australia for more than a month now. Also, Russia has ignored its domestic market to export its oil, that will not continue. IRAQ is due for a gap in production too. Also, marginal wells are probably being shut in large numbers. The API data is probably accurate, but it just shows the U.S. market, yet the futures market treats the API numbers like they are world-wide numbers. Also, except for about 3 weeks in a row recently, the API statistics have been showing almost constant drawdowns for at least 2 1/2 months. IMHO, there is not a glut. So, why are oil prices low? Maybe because certain groups benefit from manipulating the price down (via spin). One spin tactic is that the amount of oil in world storage is always referred to as "there is a lot of oil out there", instead of a hard number. As far as manipulation goes, low oil prices help keep the U.S. economy afloat. Also, large oil companies can buy up small oil companies cheaply when oil prices are low. Even OPEC can benefit long term by gaining market share (as another poster posted).

To: Tomas who wrote (32068)	11/24/1998 12:16:00 AM
From: Aggie	Read Replies (1) \| Respond to of 95453

Hey, Tomas Man, you're a wealth of information tonight! I first read about this oil Flying Dutchman in the WSJ last month. At that time, they estimated 600 MM bbls - more than twice the total oil glut - was floating around unaccounted for in tankers, FPSO's, third world stock tanks, etc. Nice to see they got that down to half. It would appear that our accounting mechanism is seriously flawed. And that's scary, since the price of oil is speculatively based on the premise that these numbers are fundamentally correct. Nice to know that the GAO is on the case, ha ha. Anybody with a credible reputation getting involved as well? Aggie