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Microcap & Penny Stocks : ASK: "THE LAST DON" OF MOMENTUM TRADES -- Ignore unavailable to you. Want to Upgrade?

To: J. Nelson who wrote (802)	12/16/1998 8:45:00 AM
From: MoneyMade	Read Replies (1) \| Respond to of 15987

Crude Oil Jumps After UN Weapons Inspectors Leave Iraq; Attack Seen Soon Crude Oil Surges as UN Weapons Inspectors Leave Iraq (Update2) (Rewrites 1st and 2nd paragraphs.) London, Dec. 16 (Bloomberg) -- Crude oil jumped 7 percent, the largest gain in three months, after the withdrawal of United Nations officials from Iraq raised concern that U.S.-led air strikes in the oil-rich Middle East could be imminent. Iraq, which pumps more than 3 percent of the world's oil supply, has failed to allow access to suspected weapons sites as promised, the top UN weapons inspector said in a report. U.S. and U.K. officials have warned that further Iraqi defiance could lead to unannounced air strikes. ''People believe the U.S. and the U.K. are serious this time, or else they will lose face after calling off so many attacks,'' said Peter Gignoux, head of oil brokerage at Salomon Smith Barney. Brent crude oil futures for January delivery, which expire tonight, surged as much as 71 cents, or 6.9 percent, to $10.94 a barrel on London's International Petroleum Exchange, a two-week high. A close at today's high would mark the largest gain since Sept. 3. Even after today's rally, oil prices are down more than 35 percent from a year earlier amid a global supply glut. New York crude oil futures jumped as much as 59 cents, or 5.1 percent, to $12.14 a barrel in overnight electronic trading. Iraq last month avoided a U.S.-led military strike through a last-minute promise to grant UN inspectors access to all sites and documents. The inspectors are searching for weapons of mass destruction and the capacity to make them. Big Strike? Growing impatience with Iraq could lead to a significant strike, analysts said. ''The attack won't be a pinprick,'' said Paul Beaver, a military analyst for Jane's Information Group in London, a defense publisher. The scope of any military action against Iraq will determine how much higher oil prices go, brokers said. ''If it's a hand-slapping strike, prices could come back down, but if they bomb them for two weeks and hit the oil installation, Brent could see a $1 (a barrel) gain,'' said Al Alawa, a broker at Prudential Bache (Futures) Ltd. A sustained attack on Iraq would probably halt the nation's oil exports, which amount to about 1.5 percent of global demand, the Middle Eastern Economic Survey said last month. That's because any attack would require the removal of UN monitors stationed at Iraq's Bakr terminal, for safety reasons, stopping the flow of UN-supervised oil exports. MEES also said insurance companies might refuse to provide coverage for vessels that need to call at Bakr. Other brokers said a glut of oil in the world market could compensate for a loss of Iraqi output, though still unclear are the wider implications of air strikes in the politically unstable Middle East, which provides more than a quarter of the world's oil. Wider Conflict? ''Things could escalate if Saddam fires-off a few missiles towards Israel, because then the Middle East could slip in to disarray and that would give us long term supply problems,'' said Tony Machacek, head energy broker at Credit Lyonnais Rouse Ltd. Prices also rose ahead of a meeting tomorrow in Madrid, Spain, where oil ministers from Saudi Arabia, Venezuela and Mexico will meet to discuss strategies to eliminate a world oil glut. The three nations represent almost 20 percent of world oil supply. Even after today's rally, oil prices are down more than 35 percent in the past year. Although the world's oil producers have tried to cut output by 3.23 million barrels a day, several nations have failed to deliver on their promises, leaving the market awash with excess supplies. In his report to the UN, Butler said that no progress is being made in disarming Iraq of weapons of mass destruction. Economic sanctions have been in place against Iraq since its 1990 invasion of Kuwait. They won't be lifted until the UN is satisfied Iraq has surrendered its arsenal.