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To: Elmer who wrote (33086)	12/18/1998 8:17:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

Elmer: Excellent post! Perhaps we can rebound faster than I thought.

To: Elmer who wrote (33086)	12/18/1998 2:40:00 PM
From: Rob Shilling	Read Replies (2) \| Respond to of 95453

Elmer, thanks for posting the IEA numbers and for the good analysis. It is really hard to trust the IEA month to month. According to those numbers the IEA had to "revise down" September storage by 20 million barrels. Then according to the IEA, the October numbers shows 3 million barrels less than September. So, taking into account the IEA seems to have at least a 20 million barrel margin for error, the 3 million barrel drawdown in October could really be a 23 million barrel drawdown or a 17 million barrel addition depending on how much monthly error the IEA has for October. That is problem number 1, problem number 2 is that the IEA's recent production and demand numbers show a 5-6 mbpd drawdown assuming only limited cheating by OPEC. That is why we should be seeing up to 150 million barrel drawdowns per month. We haven't yet though. But if we add in all of the "revisions", and perhaps the missing 300 million barrels, there indeed a case for this drawdown to be true. Finally since world-wide growth is still positive and some asian countries have now hit bottom, one can assume demand is growing consistently currently though the media talks a lot about how "demand is dropping". World-wide growth is supposed to be 1.8% this year and little changed next year. 1.8% of 75 mbpd in demand is another 1.35 mbpd. Also, with such low oil prices and many announced capital spending cutbacks, one can assume world-wide capacity is destined to drop in 1999. So with currently only 4-5 mbpd more supply in the world compared to demand, and a consistent increase in demand, 1999 is shaping up to be a year where we get very close to true supply/demand equilibrium. At least that is my opinion. At any rate, I agree with you that it will be very hard to make a case for a "glut" by March. How about a little more manipulation: The bombing hit an Iraq refinery that was the source of some of illegal oil smuggling ... oil prices drop ..... I am still confused.