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

To: Bilberry who wrote (32831)	12/14/1998 6:04:00 PM
From: Captain James T. Kirk	Read Replies (1) \| Respond to of 95453

FOCUS-Oil advances on producer talks, Venezuela (Updates prices, adds Venezuelan, Saudi comments) By William Maclean LONDON, Dec 14 (Reuters) - Glutted oil markets gained ground on Monday after Venezuela said it was considering fresh supply cuts and Saudi Arabia called again for action to support prices. Benchmark Brent tip-toed into double figures to trade 31 cents firmer at $10.13 a barrel at 1643 GMT, half a dollar above a fresh 12-year low struck on Thursday. The market rose early on news that oil ministers of big producers Saudi Arabia, Venezuela and Mexico would meet on Thursday in Madrid to talk about ways of rescuing prices wallowing at 12-year lows. That news raised prospects for another round of production restraint to sweep prices up from a 12-year floor. A Gulf source familiar with Saudi thinking said that fresh volume cuts and extensions of existing reductions would both be up for discussion. Prices rose again after state Petroleos de Venezuela head Luis Guisti said his government was considering fresh output cuts, but he expected prices to stay low in the medium term. More support came from a statement by Saudi Arabian King Fahd supporting a recent call by Crown Prince Abdullah for action by OPEC and non-OPEC states to shore up markets. But analysts were not convinced that the Madrid meeting would produce fresh cuts despite its similarity to previous gatherings of the trio this year that sealed volume sacrifices. Analysts cautioned a sharp rally remained highly unlikely in view of a stubborn overhang of stocks and simmering differences within OPEC about compliance with existing pledged cuts. ''I can't see anything having an impact on the price. Remember that we've got all-time high inventories compounded by falling demand,'' said Mark Redway of London's T. Hoare & Co. Producers have found it difficult to get full compliance with cuts of 3.1 million barrels per day (bpd) orchestrated by the trio in talks in Riyadh in March and Amsterdam in June. The bulk of the volume cuts have come from 2.6 million bpd in reductions agreed by 10 of the 11 members of the Organisation of the Petroleum Exporting Countries. Sanctions-bound Iraq plays no part in the cuts. One of several sticking points has been Iran, which insists its 305,000 bpd of pledged cuts should be made from a baseline of 3.9 million bpd rather than the 3.6 million bpd it agreed at an OPEC meeting earlier in the year. And Venezuela in November was pumping some 305,000 bpd above its allocation, although president-elect Hugo Chavez reiterated over the weekend his government would respect its output quota. Renewed Venezuelan discipline could hasten a resolution of wider issues that eluded OPEC at a meeting last month, OPEC watchers say. That gathering ended without even an agreement to extend the existing cuts by six months to the end of 1999. OPEC President Youcef Yousfi said at the weekend that OPEC members were discussing the possibility of an emergency meeting before March. ''I don't think (the Madrid talks) will be about more cutbacks, but more importantly what the (Venezuelan) President-elect said yesterday about continuing with the commitment,'' Mexican Energy Ministry spokesman Octavio Mayen said on Sunday. ''The point of the meeting is to revise oil strategy, revise the agreements made over the cutbacks, ratify respect for the cutbacks and evaluate (them),'' he said. Dec 14 Dec 11 (1643 GMT) (close) IPE January Brent $10.13 $9.82 NYMEX January light crude $11.21 $10.79 --------------------------------------------------------------------------------

To: Bilberry who wrote (32831)	12/14/1998 10:27:00 PM
From: Rob Shilling	Read Replies (3) \| Respond to of 95453

The IEA messes up the numbers again. From the IEA news release on Non-OPEC production: Total non-OPEC crude output in 1998 will amount to just a half a percent gain over annual 1997 levels, at 40.99 million barrels a day, up 210,000 bpd, a Reuters survey shows. From an article in the WSJ just a month ago the IEA said 1998 non-OPEC supply was 44.6 mbpd. So they were off by 3.6 mbpd. One can also assume the 1998 number includes a dramatic dropoff in production in the last 3 months, so 1999 could be even lower than 1998's 40.99 mbpd. Now, if you add the OPEC production for September that was in the WSJ article (27.19 mbpd) to the non-OPEC number one gets around 68.2 mbpd. Demand for 1998 was supposed to be around 74.3 mbpd. So EVEN WITH SOME OPEC CHEATING one gets at least a 5.5 mbpd drawdown currently!!! As I have posted before, the story in the oil patch that was not reported on until today is that Non-OPEC production has been reduced significantly. But what does the media focus on ?? OPEC and a few hundred thousand barrels per day of cheating. Don't trust the media or the gurus, IMHO, January will bring the reversal of the manipulators from short to long and we will soon see statements such as: "world-wide oil in storage is surprisingly lower than forecasted".