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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (14559)	12/31/1998 12:03:00 PM
From: Kerm Yerman	Respond to of 15196

MARKET WRAP FOR DAY ENDING WED. 12/30/98 / With Focus On Canada + Oil & Gas (Page 2 of 6) CRUDE OIL Following Content Index 12/30 15:20 World oil sags on glut despite Iraq clash 12/30 15:49 U.S. cash crude - WTS continues to strengthen 12/30 16:23 NYMEX crude ends a bit up on light short covering 12/30 16:23 U.S. Cash Products-NYH extends gains on refiners 12/30 17:22 North Sea Brent gains eight cents in late U.S. 12/30 17:44 U.S. foreign crudes steady in thin holiday trading 12/30 20:16 U.S. West Coast ANS prices ease, discount flat —————————————————————————————— 12/30 15:20 World oil sags on glut despite Iraq clash Oil prices sagged under the weight of global oversupply on Wednesday despite a fresh clash between producer Iraq and U.S. and British warplanes. Benchmark Brent crude for February delivery closed 13 cents down at $10.48 a barrel. Prices declined after neutral U.S. storage data released overnight failed to excite buyers, traders said. Mild weather in northern Europe also played its part in dampening winter demand in an enfeebled market buried under a mountain of stored oil. Prices recovered a meagre 10 cents on news that Iraq opened fire on U.S. and British aircraft on Wednesday in the southern Iraqi no-fly zone and coalition aircraft retaliated. A U.S. Defense Department spokesman said there were no coalition casualties and U.S. and British aircraft had returned to their bases in southwest Asia. It was the second such incident in two days and traders said the market looked like becoming inured to such confrontations nine days after the end of the full-scale Anglo-American attacks of operation Desert Fox. Markets were unimpressed by weekly data from the American Petroleum Institute (API) industry grouping late on Tuesday showing U.S. crude inventories falling by 2.36 million barrels. Traders said a rise in stocks of refined products like distillates and gasoline had offset the crude drawdown to an extent, pulling crude futures prices lower. And overall crude stocks of 337 million barrels were more than 20 million barrels higher than at the same week last year, dampening any bullish impact from the weekly drawdown. Brent this year has averaged only $13.37 a barrel, down by a third from an average $19.30 in 1997 and the lowest average price since 1976. Last week it hit a 12-year low of $9.55. Further pressure came from a report that stocks at sea are rising, showing that previous output cuts "are looking like a passing phase," according to industry newsletter Oil Movements. Loud weekend complaints from cash-strapped Gulf producers about overproduction only confirmed traders' belief that rapid assistance cannot be expected from the producer club OPEC. The 11-member group has been waylaid by a rancorous dispute about some countries' lack of compliance with promised output cuts aimed at rescuing glutted markets. OPEC watchers say Iran's insistence that it be allowed to pump more than it signed up for may only be solved if and when political contacts take place between Iran and Saudi Arabia. Iran's production has come under scrutiny since Saudi Arabia, Venezuela and non-OPEC Mexico reached an accord in Madrid this month aimed at securing Venezuelan compliance. 12/30 15:49 U.S. cash crude - WTS continues to strengthen The U.S. crude market was shaken out of its holiday slumber by a fire at one of the nation's largest refineries on Wednesday morning, but soon the fire was said to have little impact on operations. In turn, the fire at Exxon Corp's (XON.N) refinery in Baytown, Texas had little affect on crude oil prices after a blip in the morning, traders said. The fire broke out at Exxon Corp's 427,000 barrel per day Baytown, Texas at 5:42 a.m. local time (1142 GMT), the company said in a statement. West Texas Intermediate/Midland was the dynamic crude oil grade for the third straight day, increasing in value by about 15 cents in terms of its relation to the U.S. cash crude benchmark West Texas Intermediate/Cushing. WTS/Midland was done at a dollar under the benchmark on Wednesday. The benchmark wasn't changed much on Wednesday as the futures New York Mercantile Exchange front-month February contract closed down a single penny to $11.71 per barrel. The March contract closed at $11.91 per barrel, up one cent. Most other cash crude differentials were fairly steady in listless trade, though West Texas Intermediate/Midland reportedly changed hands at 25 cents below the benchmark. Meanwhile, U.S. crude traders were quoting Light Louisiana Sweet/St. James at -3/+2 cents in relation to WTI/Cushing, while Heavy Louisiana Sweet/Empire was stuck at -40/-25 cents. LLS was done at -1 cent to WTI/Cushing. The spread between February and March prices was hovering around 17 cents in favor of March. And WTI/Cushing postings plus was pegged at $2.36/2.40. The oil prices weren't significantly affected by the exchange of fire between Iraq and the United States over the southern no-fly zone in Iraq. Iraq does not recognize the no-fly zones, which were imposed by the U.S., not the United Nations Security Council. It was the second such clash this week. On Monday, Iraqi ground fire greeted jets over the northern no-fly zone in Iraq. But the U.S. oil market seemed less concerned with the flare-up than latest industry stock figures, which showed large build in heating oil and gasoline inventories for the week ending December 25. In its Tuesday report, the American Petroleum Institute also showed a 2.4 million barrel decline in crude stocks. 12/30 16:23 NYMEX crude ends a bit up on light short covering - Crude oil futures on the New York Mercantile Exchange (NYMEX) wiped out their day's losses near the close in a bit of light short covering Wednesday, traders said. February front-month contract last traded at $11.70 a barrel, off two cents from Tuesday, and then settled at $11.75, up three cents. Near the session's end, the contract rose to $11.78, but lack of buying interest pushed it down again, traders said. The contract slipped to an intraday low of $11.43 near midday as the market reacted bearishly to the latest weekly inventory report from the American Petroleum Institute. The report covering the week ended Dec. 25 showed heating oil and gasoline stocks increasing nationwide by about 1.7 million barrels each, offsetting a big 2.4-million-barrel draw in crude stocks. The front-month heating oil and gasoline contracts ended lower, under selling pressure as they face expiry in a shortened trading session on Thursday, the last for the year. January heating oil last traded at 32.85 cents a gallon, down 0.48 cent and then settled at 32.92 cents, down 0.41 cent. The contract earlier skidded to an intraday low of 32.60 cents, and rose to a session high of 33.10 cents. The February contract ended at 33.62 cents a gallon, down 0.35 cent from Tuesday. January gasoline last traded at 34.60 cents, down 0.53 cent, before settling at 34.77 cents, down 0.70 cent. The contract traded between 34.55/35.20 cents. The February contract ended at 35.85 cents, down 0.67 cent. Traders said two refinery troubles failed to put any brakes to the day's downtrend, traders said. Exxon Corp. reported a fire at a flexi-coker unit at its 427,000 barrel per day (bpd) refinery in Baytown, Texas, and Amerada Hess said a problem at Amerada Hess' 62,000 bpd catalytic cracker at Port Reading, N.J., required a temporary shutdown at least through the weekend. After the market closed, Exxon said its refining output at Baytown was unaffected by the fire. It said it had put out the fire earlier in the day. The cause of the fire is under investigation but a spokesman could not say how long the 37,000 bpd unit will be down. Heigtened tensions surrounding Iraq's no-fly zones remained a talking point among traders. But the latest incident, in which U.S. and British aircraft retaliated on Wednesday after an Iraqi missile battery opened fire -- the second such clash this week -- had very little impact in the day's activity, traders said. 12/30 16:23 U.S. Cash Products-NYH extends gains on refiners New York Harbor oil product differentials ended Wednesday firmer as one refiner was still buying gasoline amid a cracker shutdown, while another raised its posted distillate prices, traders said. But Gulf Coast gasoline slipped half a cent a gallon despite a fire shutting down Exxon Corp's 37,000 barrel-per-day (bpd) Baytown, Texas flexi-coker early Wednesday as the rest of the 427,000 bpd plant was running normally. The rest of the Gulf differentials were also softer ahead of heavy scheduling before the holidays. In the northeast, Amerada Hess (AHC.N) was still buying "all grades of gasoline" after a problem last weekend at its 62,000 barrels-per-day (bpd) catalytic cracker at Port Reading, N.J., traders said. A company spokesman said the plant which consists mainly of the cracker will be shut "at least through the weekend". Traders in the New York Harbor trading hub said that Hess has been buying at least 100,000 to 150,000 barrels of gasoline. Sentiment in New York Harbor was also boosted with the region reporting the only draws amid a bearish nationwide stock build. The American Petroleum Institute (API) reported a stockdraw of 2.4 million barrels in U.S. crude inventories for the week ending Dec. 25. But a stockbuild in heating oil and gasoline stocks of about 1.7 million barrels each for the same week offset the crude draw, traders said. Oil futures on the New York Mercantile Exchange (NYMEX) wiped out their day's losses near the close in a bit of light short covering Wednesday, with February crude settling at $11.75 per barrel, up three cents. But both front-month heating oil and gasoline contracts ended lower, under selling pressure as they face expiry in a shortened trading session on Thursday, the last for the year. January heating oil settled at 32.92 cents, down 0.41 cent while the February contract ended at 33.62 down 0.35 cent from Tuesday. January gasoline settled at 34.77 cents, down 0.70 cent.The February contract ended at 35.85 cents, down 0.67 cent. NEW YORK HARBOR Harbor gasoline differentials extended its gains on Hess' presence in the market while distillates were pulled up by Sunoco raising its prices. "Yesterday we saw Hess buying all grades of gasoline which got the numbers juiced up a abit..they have been there again today but a little thinner," a trader said. But some traders said there still ample supplies of offline barrels despite gasoline stocks in the region down by 1.2 million barrel draw, RFG inventories slipping 843,000 barrels and distillate stocks losing 675,000 barrels. Prompt conventional M5-grade gasoline was more than a half cent firmer, pegged at a 2.00/1.40 cents discount, its premium V-grade was pegged at flat to 0.40 cent over the print. Reformulated regular A4 was pegged firmer at 0.75 cents under, and premium RFG at 0.60 cents over. "Sunoco raised its postings considerably but you can still find sellers much lower," a trader said. But barges diffs were not so aggressive and prompt heating oil was pegged a quarter cent up at 0.50/0.30 cent discount to the screen and low sulphur diesel at 0.25 cent over to flat with the screen. GULF COAST Distillate and gasoline differentials ended lower ahead of a heavy scheduling deadline, traders said. Low sulphur diesel which schedules its back 1 cycle later Wednesday was traded down to 2.30 to 2.25 cents below the print, from a 2.25/2.00 cents discount paring some of its previous 0.40 cent gains. The now prompt back 1 cycle heating oil traded around a quarter cent lower at a 3.50, 3.45 cents discount. All grades of gasoline, except for the premium V-grade conventional grade schedules on Wednesday, with the regular conventional M5 last traded half a cent lower at a 5.00 cents discount and the V5 at 1.75/1.85 under. Regular reformulated A-5 gasoline was pegged at a 2.00 cents regrade to the M-grade. MIDCONTINENT Chicago and Group Three product differentials stayed firm in thin activity with most players having closed books for December, traders said. Chicago gasoline was seen at 3.50/3.25 cents under the screen, whilepremium grade was pegged at 2.25/2.50 cents regrade. Low sulphurdiesel was talked at 0.25 under to flat, while jet fuel was pegged at 0.25 cent over and under the screen. Group Three gasoline was pegged at a discount to the screen of 2.50/2.25. Premium gasoline held at 3.00/3.25 cent regrade. Low sulphur diesel was steady at flat to 0.25 cent over, and jet fuel at 0.75/1.00 cent over the screen. 12/30 17:22 North Sea Brent gains eight cents in late U.S. North Sea Brent was up eight cents in late U.S. trading on Wednesday. February Brent was valued at $10.56 a barrel, up from its close earlier Wednesday on the International Petroleum Exchange at $10.48, traders said. Activity in the aftermarket included three full cargoes of February cash Brent, two sold at $10.54 and one at $10.60. Other deals included 250 lots of February cash Brent partial cargoes at $10.57, 100 lots at $10.55, 100 lots at $10.54, and another 100 lots at $10.53. No month spreads were done in Wednesday's aftermarket, traders said. 12/30 17:44 U.S. foreign crudes steady in thin holiday trading Activity remained thin in the U.S. market for imported crudes as many traders are out in anticipation of the New Year, but differentials were mostly steady on Wednesday. NORTH SEA, WEST AFRICAN -- The trans-Atlantic arbitrage widened out to $1.27 a barrel, but traders said relatively high prices for Dated or prompt, North Sea Brent continue to damp traders' enthusiasm for bringing North Sea and West African grades into U.S. markets. "With Dated as strong as it is, it's tough. You're not going to do it unless you really have to," one trader said. One U.S major said it had bought a VLCC of Nigerian Forcados scheduled to arrive into the U.S. Gulf in the middle of February at an fob price of five cents over Dated Brent, on the high side of its range. Earlier this week, Forcados was valued at flat to five cents over Dated, traders said. West African differentials have strengthened in since last week, and Nigerian Qua Iboe, Bonny Light are valued at 10-20 cents over Dated Brent, they said. BRUNEI -- An early February arriving parcel of Brunei's heavy, sweet crude, Champion was heard sold into the U.S. Gulf this week. Although the price at which it was sold was still not known, the U.S. major who sold the parcel was offering the grade out at March West Texas Intermediate minus 90 cents. Traders said on Wednesday that the ship bringing over the Brunei grades was not a VLCC which can carry up to 300,000 tons, but a smaller ship. Similarly, the ship carrying Brunei's export blend, Seria Light was also smaller, said to be an 80,000 ton Aframax rather than a VLCC. Seria Light, a blend of Champion and Brunei Light, is priced higher than Champion, but weaker than Brunei Light. About 600,000 barrels of Seria will be kept by the U.S. major bringing the crude over to the U.S. West Coast. The major sold a parcel of Seria to a U.S. refiner on the West Coast as well, traders said. LATAM - COLOMBIA, VENEZUELA, ARGENTINA -- Colombia's light, sweet Cusiana was valued about 10 cents stronger than late last week, as traders said state-owned Ecopetrol had awarded its tender for a million barrels with flexible lifting date in February, at a discount around $1.30 under March West Texas Intermediate. Talk was relatively quiet on Cusiana, although traders expect more action next week, when bid's on Ecopetrol's latest tenders for February loading cargoes of the sweet crude are due. -- Traders remained wary of Colombia's medium-heavy Cano Limon crude, after Colombian rebels resumed their attacks on the country's oil infrastructure after a month lull. Cano Limon has been thinly talked in the past several months because of repeated disruptions in the production and was in a wide range between $2.80 and $2.45 under WTI. -- Colombia's medium heavy Vasconia crude remained valued around $2.87 under WTI, where Ecopetrol last awarded a January 4-8 loading cargo of the grade. Details about the latest Ecopetrol tender, for a cargo loading January 9-13 were still unavailable, traders said. -- February barrels of Venezuela's main sour crude, Mesa/Furrial were said to be on offer at WTI minus $2.50. Traders said a cargo traded at minus $2.55 two weeks ago. -- Argentina's heavy sweet crude, Escalante was valued around $3.90 under WTI fob, where a trader is said to have recently bought an early February loading cargo. 12/30 20:16 U.S. West Coast ANS prices ease, discount flat Pure prices for U.S. West Coast waterborne crudes eased with lower cash markets on Wednesday, while the discount was flat in what traders called a quiet week between Christmas and New Year's Day. A major producer offered Alaska North Slope (ANS) at $1.60 under February WTI. A major Washington State refinery said they were supplied for February and would not need ANS after buying Seria Light. They also sold a Seria parcel to a major Los Angeles refinery. The official discount for ANS crude remained $1.95 a barrel under February WTI despite talk that a deal was done at minus $2.05 a barrel last week. The official price remained unchanged since terms of the $2.05 deal were FOB at Valdez, Alaska, instead of the official Reuters method of CIF for West Coast delivery. In broader markets, cash crude oil prices fell seven cents a barrel to around $11.75 a barrel. The outright prices for February ANS on the West Coast fell to $9.72/9.88 a barrel, compared with $9.79/9.95 on December 29. ---------------------------------------------------------------------------------- Chart References NYMEX LIGHT SWEET CRUDE OIL PRICE CHARTS oilworld.com IPE BRENT CRUDE OIL PRICE CHARTS oilworld.com OIL INDUSTRY COMBINED GRAPH CHARTS oilworld.com ----------------------------------------------------------------------------------

To: Kerm Yerman who wrote (14559)	12/31/1998 12:18:00 PM
From: Kerm Yerman	Respond to of 15196

MARKET WRAP FOR DAY ENDING WED. 12/30/98 / With Focus On Canada + Oil & Gas (Page 3 of 6) NYMEX Furures Pricing --------------------CRUDE OIL-LIGHT SWEET--------------------- NYM - 1,000 bbl_dollars per bbl. CONTRACT OPEN HIGH LOW SETTLE CHANGE HIGH LOW Feb 99 11.75 11.81 11.43 11.75 +.03 20.79 10.75 Mar 99 12.00 12.00 11.66 11.93 +.03 20.40 11.10 Apr 99 12.15 12.18 11.93 12.15 +.03 20.79 11.35 May 99 12.21 12.35 12.15 12.35 +.03 20.79 11.63 Jun 99 12.44 12.55 12.38 12.54 +.03 20.42 11.48 Jul 99 12.73 12.73 12.70 12.73 +.03 20.40 12.20 Sep 99 13.00 13.10 13.00 13.08 +.03 20.33 12.76 Oct 99 13.17 13.25 13.17 13.25 +.03 20.14 12.97 Dec 99 13.50 13.60 13.50 13.59 +.03 20.34 13.37 Feb 00 13.89 13.92 13.89 13.92 +.03 20.16 13.78 Mar 00 13.97 14.07 13.97 14.07 +.03 20.10 13.96 Apr 00 14.14 14.21 14.14 14.21 +.03 17.81 14.12 Dec 00 15.19 15.24 15.19 15.24 +.03 20.10 15.19 Jan 01 15.35 15.35 15.33 15.35 +.02 17.32 15.32 Feb 01 15.45 15.46 15.45 15.46 +.02 17.37 15.41 Est. Sales 75971 -------------------------HEATING OIL------------------------- NYM - 42,000 gal_cents per gal CONTRACT OPEN HIGH LOW SETTLE CHANGE HIGH LOW Jan 99 33.25 33.35 32.60 32.92 -.41 59.50 31.25 Feb 99 34.00 34.15 33.40 33.62 -.35 58.50 32.40 Mar 99 34.20 34.30 34.00 34.17 -.30 58.81 33.10 Apr 99 34.55 34.65 34.40 34.57 -.25 59.00 33.70 May 99 34.80 35.10 34.75 34.97 -.25 54.56 34.30 Jun 99 35.60 35.75 35.50 35.57 -.25 52.75 35.05 Jul 99 36.35 36.50 36.30 36.32 -.25 52.90 35.85 Aug 99 37.10 37.20 37.10 37.12 -.25 50.55 36.70 Sep 99 38.05 38.10 38.02 38.02 -.25 52.00 37.60 Oct 99 38.75 39.00 38.75 38.82 -.25 52.00 38.45 Nov 99 39.85 39.85 39.67 39.67 -.25 52.44 39.34 Dec 99 40.70 40.70 40.45 40.52 -.25 52.70 40.20 Feb 00 41.30 41.40 41.07 41.07 -.25 50.08 40.74 Mar 00 41.35 41.35 40.92 40.92 -.25 50.60 40.59 May 00 40.75 40.75 40.42 40.42 -.25 46.00 40.42 Est. Sales 36406 --------------------------NATURAL GAS------------------------- NYM - 10,000 mm british thermal units. CONTRACT OPEN HIGH LOW SETTLE CHANGE HIGH LOW Feb 99 1.785 1.890 1.780 1.886 +.105 2.770 1.770 Mar 99 1.790 1.880 1.790 1.879 +.080 2.600 1.790 Apr 99 1.790 1.870 1.790 1.855 +.058 2.440 1.790 May 99 1.830 1.875 1.828 1.870 +.043 2.380 1.820 Jun 99 1.872 1.890 1.860 1.890 +.030 2.380 1.860 Jul 99 1.900 1.920 1.895 1.915 +.025 2.390 1.875 Aug 99 1.940 1.940 1.925 1.940 +.020 2.390 1.920 Sep 99 1.960 1.975 1.950 1.970 +.020 2.380 1.950 Oct 99 2.000 2.020 1.997 2.015 +.015 2.415 1.997 Nov 99 2.160 2.165 2.150 2.155 +.010 2.535 2.140 Dec 99 2.320 2.330 2.310 2.320 +.010 2.680 2.213 Jan 00 2.390 2.395 2.370 2.385 +.005 2.655 2.320 Feb 00 2.310 2.310 2.304 2.304 +.005 2.545 2.300 Mar 00 2.220 2.220 2.205 2.205 +.005 2.426 2.195 Apr 00 2.130 2.130 2.115 2.115 +.005 2.320 2.115 May 00 2.095 2.095 2.090 2.090 +.005 2.300 2.090 Jun 00 2.099 2.099 2.094 2.094 +.005 2.308 2.094 Jul 00 2.112 2.112 2.107 2.107 +.005 2.320 2.099 Aug 00 2.121 2.121 2.116 2.116 +.005 2.320 2.102 Sep 00 2.127 2.127 2.122 2.122 +.005 2.321 2.102 Oct 00 2.152 2.152 2.147 2.147 +.005 2.341 2.100 Nov 00 2.280 2.280 2.275 2.275 +.005 2.469 2.048 Dec 00 2.416 2.426 2.416 2.421 +.005 2.615 0.244 Jan 01 2.465 2.465 2.464 2.464 +.005 2.613 2.464 Feb 01 2.345 2.345 2.340 2.340 +.005 2.505 2.340 Mar 01 2.246 2.246 2.241 2.241 +.005 2.410 2.241 Apr 01 2.137 2.142 2.137 2.142 +.005 2.315 2.137 Est. Sales 44020 ------------------------UNLEADED GAS-------------------------- NYM - 42,000 gal_cents per gal CONTRACT OPEN HIGH LOW SETTLE CHANGE HIGH LOW Jan 99 35.50 35.70 34.55 34.77 -.70 51.30 32.50 Feb 99 36.50 36.95 35.65 35.85 -.67 52.75 34.10 Mar 99 36.55 37.75 36.40 36.98 -.62 52.30 35.60 Apr 99 40.10 40.30 40.10 40.10 -.57 55.00 38.70 May 99 41.20 41.25 40.95 40.95 -.54 55.83 39.90 Jun 99 41.50 41.55 41.50 41.55 -.53 54.70 40.70 Jul 99 42.05 42.05 41.95 42.05 -.50 52.60 41.20 Canadian spot natural gas domestic prices - Dec 30th DOMESTIC (DEC SWING) $CDN/GJ $US/MMBTU ALBERTA PLANT-GATE 2.38/2.43 1.65/1.69 ALBERTA BORDER - EMPRESS 2.57/2.62 1.78/1.82 STATION 2, B.C. 2.50/2.55 1.74/1.77 SASK. PLANT-GATE 2.38/2.43 1.65/1.69 TORONTO CITY-GATE 2.74/2.81 1.90/1.95 1-YR PCKGS - EMPRESS 2.73/2.78 1.90/1.93 AECO 2.50/2.55 1.74/1.77 N=notional. One yr package beginning Nov. 1, 1999. Canada/U.S. dollar conversion based on Bank of Canada noon rate One year packages converted to U.S. dollars at a 12-month forward rate. Canadian spot natural gas export prices - Dec 30th EXPORT (DEC SWING) $CDN/GJ $US/MMBTU HUNTINGDON B.C. 2.45/2.52 1.70/1.75 KINGSGATE B.C. (TO PNW) 2.69/2.77 1.87/1.92 MONCHY SASK 2.13/2.20 N 1.48/1.53 N EMERSON MAN 2.64/2.71 1.83/1.88 NIAGARA ONT 2.78/2.85 1.93/1.98 Canada/U.S. dollar conversion based on Bank of Canada rate. N equals Notional

To: Kerm Yerman who wrote (14559)	12/31/1998 1:57:00 PM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

MARKET WRAP FOR DAY ENDING WED. 12/30/98 / With Focus On Canada + Oil & Gas (Page 4 of 6) The TSE oil and gas composite added 0.2% or 11.05 points to 4498.22. Among the sub-components, the oil and gas services rose 2.4% or 32.02 to 1341.06. On the downside, the oil & gas producers fell 0.2% or 6.95 to 3913.83 and the integrated oils eeked out a loss of 1.97 points to 6954.91. ---------------------------------------------------------------------------------- Oil & Gas Charts - TSE 300 Oil & Gas Composite chart.canada-stockwatch.com Integrated Oil's chart.canada-stockwatch.com Oil & Gas Producers chart.canada-stockwatch.com Oil & Gas Srvices chart.canada-stockwatch.com ---------------------------------------------------------------------------------- Oil and gas issues among the top 50 most active treaded issues included Petro-Canada -$0.20 to $15.95, Gulf Canada Resources +$0.55 to $4.15, Pacalta Resources +$0.25 to $4.35, Talisman Energy -$0.05 to $25.70, Fraqcmaster +$0.30 to $4.50, Canadian Occidental Petroleum -$0.55 to $15.35, Renaissance Energy -$0.25 to $16.75 and Remington Energy $0.35 to $4.95. Gulf Canada Resources Ltd. stock got a boost after John Clarke, an energy analyst at Deutsche Bank Securities, raised his recommendation to "accumulate" from "hold." Yesterday the TSE oil & gas subindex rose 11.05 points, or 0.3%, to 4498.22. Since its 52-week low on Sept. 1, the subindex has climbed a mere 3.3%, compared with the TSE 300's 16% rise in the same period. Among top gainers, Enerflex Systems gained $1.50 to $28.00, Northstar Energy $1.00 to $44.00, Lundin Oil AB $0.75 to $3.25, Canadian Hunter Exploration $0.60 to $10.25, Gulf Canada Resosurces $0.55 to $4.15 and Prudential Steel $0.45 to $6.80. Net losers included westminster Resources $0.65 to $5.75, Canadian Occidental Petroleum $0.55 to $15.35 and Alberta Energy $0.40 to $32.70. Percentage gainers included Lundin Oil AB, Rider Resources, Gulf Canada Resources, Upton Resources, Kookaburra Resources, Ocelot Energy B, Petrobank, fracmaster, Prudential Steel and Probe Exploration. Percentage losers included Westminster Resources, CE Franklin, Newport Petroleum, Ryan Energy Tech, Remington Energy, Phoenix Canada, Summit Resources, Pason Systems, Magin Energy, Enertec Resource Services and Peak Energy Services. There were no new highs among oil and gas issues. Canadian Conquest Exploration, Canadian Crude Separators, Computalog, Enertec Services and Ranger Oil slumped to new 52-week lows. Other Canadian Stock Exchanges The Montreal Stock Exchange's portfolio index fell 1.3% or 45.23 to 3311.45 on slow volume of 7.7 million shares worth a value of $66.1 million. Advancing issues outnumbered decliners 173 to 149 with 319 unchanged. Twelve issues reached new highs while 2 issues reached new lows. The MSE oil and gas portfolio fell 0.3% or 5.03 to 1947.42. Five issues traded over 100,000 shares and included Bombard B -$0.35 to $21.65, DTM Info Tech +$0.25 to $2.00, Cambridge Shp $-0.40 to $12.60, Domtar +$0.20 to $8.55 and Molson A, unchanged at $21.50. Among oil & gas issues, Gulf Canada Resources +$0.46 to $4.10, Crestar Energy -$0.85 to $12.25 and Talisman Energy +$0.25 to $25.90 were among the most active traded issues. Top gainers included Suncor Energy $0.55 to $44.40, Gulf Canada Resources $0.46 to $4.10 and Poco Petroleums $0.35 to $12.25. Among the net losers were Crestar Energy, down $0.85 to $12.25 and Canadian Occidental Petroleum $0.30 to $15.45. Top percentage gainers included Ocelot Energy B, Gulf Canada Resources and Fracmaster. Crestar Energy made the percentage losers list. The Vancouver Stock Exchange's composite indicator index gaained 0.9% or 3.26 to 383.04. The mining indicator index also rose 1.0% or 2.86 to 288.50. Volume was a moderate 17.5 million shares worth $10.3 million. Advancing issues outnumbered those that declined, 220 to 197 and another 224 issues were unchanged. Six issues reached new highs while 25 sank to new lows. Four issues traded over 200,000 sharesand they were Winspear Resources +$0.09 to $3.94, Polymet Mining +$0.28 to $1.35, Argentina Gold -$0.05 to $5.10 and Morgain Minerals +$0.01 to $0.37. The most active traded oil & gas issues included Equatorial Energy, unchanged at $0.40 and Ultra Petroleum +$0.06 to $1.22. Humbolt Capital gained $0.29 to $0.95, BPI Industries rose $0.21 to $1.38. Oil & gas issues were not among the top net losers. Percentage gainers included Humbolt Capital, Osprey Energy an AB Geoscience. Shamrock Resources made the list of percentage losers. The Alberta Stock Exchange's combined total index gained 1.5% or 24.96 to 1725.28. This gain came on the heels of Tuesday's healthy gain of 1.5% or 24.63 points to 1700.82 on volume of 11.7 million shares. On Wednesday, 9.5 million shares traded worth a value of $3.1 million. A total 346 issues traded with 126 advancing, 96 decflining with another 124 unchanged. There were seven new highs and ten new lows. Six issues traded over 75,000 shares and included Sepik Gold -$0.02 to $0.28, TCR Environmental -$0.09 to $0.80, Prize Enrgy -$0.05 to $0.35, Comac Food B unchanged at $0.25, Bluestar Battery +$0.25 to $1.85 and KeyWest Energy unchanged at $0.70. In addition to Prize Energy and KeyWest Energy, Anvil Resources +$0.01 to $0.46, Parkcrest Exploration +$0.05 to $0.28 and Bakrie Minarak Energy +$0.10 to $0.75 made the top 25 most active traded issues listing. Among top net gainers were Redwood Resources $0.20 to $0.70, Edge Energy $0.19 to $2.45, Westlinks Resources $0.15 to $0.45, red Sea Oil $0.13 to $1.23, Bakrie Minarak Energy $0.10 to $0.75, Lexxor Energy $0.10 to $0.35 and Northline Energy $0.10 to $1.35. Net losers included Solid Resources $0.30 to $6.75, Surefire Energy $0.07 to $1.00, Mera Petroleum $0.05 to $0.90, Prize Energy $0.05 to $0.35, Reliance Services Group $0.05 to $0.70 and Scarlet Exploration $0.05 to $0.32. Top percentage winners included Westlinks Resources, Lexxor Energy, Redwood Resources, Circle Energy, Parkcrest Exploration, Bakrie Minarak Energy and Delaney Energy. Percentage losers included Scarlet Exploration, Reliant Services Group and Sunfire Energy. Hot Stocks Jeweller's Internet play adds sparkle to stock OnLine shopping: D.G. Jewellery president 'shocked' by market reaction By Kim Hanson - The Financial Post Toronto-based D.G. Jewellery of Canada Ltd. raised a few eyebrows yesterday after its stock price surged on news it plans to sell jewelry on the Internet by next February. D.G. Jewellery, which is listed on Nasdaq and the Boston Stock Exchange, and markets mostly mainline discount jewelry, was flooded with calls after its share price briefly soared to a high of $9 1/2 (all figures in U.S. dollars) in early trading. The shares of the company, little known to the Canadian investment community, closed at $5 on heavy volume of about 515,100 shares. Tuesday's close was $4 1/2. "I was shocked," said Jack Berkovits, D.G. Jewellery's president and chief executive. "We did not expect this market reaction. "In the last four months not one of our announcements have created a stir and this announcement was supposed to be a goodbye kiss for the year," added Mr. Berkovits, who is on vacation in Florida. The Web site, which should be up and running by Feb. 1, is expected to attract everyone from department store shoppers to high-end jewelry buyers, he said. Online shoppers will also be able to choose the size, style, and price they want. About 90% of D.G. Jewellery's sales are generated through two of its U.S.-based subsidiaries, but the company has been busily expanding its presence in Canada and will apply for listing on the Toronto Stock Exchange in 1999, Mr. Berkovits said. The company has posted record profit in the last quarter and signed a six-year contract in November with Zellers Inc. to market rings and other fine jewelry. D.G. Jewellery joins other online retailers that have watched their share price rise because of the perceived potential to benefit from online shopping services. But some industry watchers say e-commerce or online shopping may be just a fad that could eventually become passe. "E-commerce or shopping on the Internet is the Viagra for retail marketing. All of a sudden it's a magic drug," said retail consultant Len Kubas of Kubas Consultants in Toronto. "Online shopping might not have long-lasting effects as more and more retailers go online. But it is certainly indicative of this unusual interest and value being placed on going online." But Mr. Kubas anticipates other Canadian retailers will feel compelled to create online services. "If they're not online they will be. I don't think that there will be one retailer in Canada that won't have a Web presence in 1999," he said. Forrester Research Inc., a Massachusetts-based technology research firm, says online retail revenue in North America will grow to $17.4-billion by 2001 and Internet sales of jewelry will grow from $78-billion in 1999 to $140-billion by 2001. Market Stories Heady Valuations Coming To An End Consolidation ahead: Research group sees mergers of portal and media firms By Ian Karleff - The Financial Post The era of gravity-defying Internet stock valuations will come to an end in 1999, information technology research firm International Data Corp. predicted yesterday. At the same time, another firm noted a new batch of Internet stocks will make their debut early in the new year. IDC's prediction proved to be self-fulfilling -- if a few days early -- as investors bailed out of the high-flying sector. Even America Online Inc. (AOL/NYSE) -- the newly crowned Internet bellwether that come January will be a member of the Standard & Poor's 500 -- fell $5 1/4 to $148 (all figures in U.S. dollars). Internet auction companies suffered the largest losses, with eBay Inc. (EBAY/NASDAQ) falling 8% to $252 7/8, uBid Inc. (UBID/ NASDAQ) losing $24 1/2 to close at $119, and Toronto based Bid.com International Inc. (BII/TSE) shedding 30c to $3.80 (Cdn). Online auctioneers' stocks have been market wonders since going public, with eBay rising as much as 1,627% from its initial public offering price of $18, and uBid hitting a December high of $189, which was 1,160% higher than its $15 IPO. Both are among the top 10 biggest gainers recorded by U.S. stocks on their first day of trading, according to Securities Data Co. Securities Data also said that 14 initial public and secondary offerings are registered with the U.S. Securities & Exchange Commission. Some of these are equity carve-outs by established firms, including Marketwatch.com, 50%-owned by CBS Corp., and ZDNet, which is now owned by publisher Ziff-Davis. In its fourth annual report of Internet predictions, IDC said the impending market correction will create winners and losers in the Internet market, intensifying competitive pressure and forcing companies to consolidate. Frank Gens, IDC's senior vice-president of Internet research, thinks likely mergers could include leading Web portal Yahoo Inc. (YHOO/NASDAQ) joining media companies such as Time Warner Inc. or CBS. As recently as July, Time Warner chairman Gerald Levin said the company had no interest in buying Internet companies such as Yahoo. A CBS spokesman said the company does not comment on speculation. Portal or search engine stocks lost a substantial amount of ground yesterday, with Yahoo topping the net loss leaders, down $25 3/8 to $244 5/8 and Excite Inc. (XCIT/NASDAQ) off $4 1/16 to $44 1/4. Mr. Gens also said online broker ETrade Group Inc. could sell out to a large financial firm such as Citigroup Inc. or Wells Fargo & Co., and software giant Microsoft Corp. might buy a major Web portal. Spokesmen for the companies in question were not immediately available for comment. ETrade (EGRP/NASDAQ) fell $9 5/16 to $50 13/16 , after earlier this week lighting a fire under the stocks of brokerages with online affiliations -- including Toronto-Dominion Bank, owner of Waterhouse Securities -- with news it had attracted 500,000 members to its information Web site. The Internet will change dramatically in the way it affects day-to-day life, IDC said. The firm predicts that many retailers will provide Web access through kiosks in their stores, while live salesmen will be available on retail Web sites. "Not having an Internet presence and an Internet commerce strategy is a recipe for market share loss," Mr. Gens said. "In the U.S. market, starting in 1999, the virtual market is reality." "E-tailer" stocks were not spared yesterday's carnage, with book retailer Amazon.com Inc (NASDAQ) down $11 1/16 to $32 11/4. One of the newest entrants to the Internet party, airline catalogue firm SkyMall Inc. (SKYM/NASDAQ), plummeted $13, or 32%, to $27 3/4. Going against the grain of losing Internet plays was infrastructure software developer Inktomi Corp. (INKT/NASDAQ), up $5 to $132. The firm said it had approved a two-for-one stock split for shareholders of record as of Jan. 12. Since going public on June 10, 1998, at $18 a share, the stock has appreciated 715%. IDC predicted PC prices would drop to the $400 range and be present in over half of U.S. households, Internet use would jump to 147 million users, and Internet commerce would more than double to $68-billion. Demographics would change in 1999 as women broke through the 50% mark, and for the first time more than half of Internet users would live outside the United States. The Bubble May Be About To Burst, Experts Warn Internet roulette: Small investors 'taking a big risk playing this market' By David Akinv- The Financial Post All year long, sober, reliable financial advisors have been telling whoever cared to listen that the Internet bubble surely had to burst and it would do so very soon. But like children ignoring admonitions to stay away from the cookie jar, investors in 1998 couldn't get enough of anything connected with the Internet. The experts are still forecasting a falling out in the new year. Surely, they say, there must be a coming to terms with the nosebleed valuations of firms such as eBay Inc., Amazon.com, and Yahoo Inc. Dan Gillmor, an influential Silicon Valley columnist with the San Jose Mercury News, said as much in his year end wrap-up: "If you are a small investor and playing this market with money you really can't afford to lose, you are nothing but a gambler. You may win. But you are playing a fool's game. Don't expect much sympathy if you lose." OK. But how can you resist a sector where prices are doubling every month? Take eBay (EBAY/NASDAQ), operator of a wildly successful online flea market. It went public on Sept. 24 and three months later investors have taken the stock up as much as 1,627%. The company, now worth $11-billion (US), has almost caught up to that of 91-year-old Kellogg Co. Sales at Kellogg for the first three quarters of 1998 were $5.2-billion (US). EBay had sales for the first nine months (its yearend 1998 results will be released on Jan. 26) of only $12.9-million (US). Meanwhile, Amazon.com (AMZN/NASDAQ), an online bookseller, just kept rolling along. Even though the company has not made a penny for its investors, its stock is not quite 1,000% higher than a year ago. The market cap of America Online Inc. (AOL/nyse) is about $70-billion (US), making it bigger than Walt Disney Co. AOL shares gained more than 550% in 12 months. Yahoo (YHOO/NASDAQ) was up 606%, Excite Inc. (XCIT/NASDAQ) was up 198%, and even Microsoft Corp. (MSFT/NASDAQ) rose 115% in the year, despite its legal troubles. Some Canadian high-tech firms also did well this year. Investors warmed back up to Corel Corp. (COS/TSE) giving its share price a 165% jump to date. The stock rose 10c to close at $6.10 yesterday. SoftKey Software Products Inc. (SSK/TSE) jumped 51.8%; and Bid Com International Inc. (BII/TSE) was up 24.6%. CGI Group Inc. of Montreal (GIBa/ME) is a favourite of Josef Vejvoda, technology analyst at Levesque Beaubien Geoffrion Inc. in Toronto. Its share price soared 144% in 1998 to close yesterday at $29.75, up $1.30. Despite a high multiple, he has a 12-month price target of $38. "Look at how much CGI has in backlog. It's like $4.5-billion. From this year to next year, it's guaranteed to double revenue and earnings. People say, 'That's a little aggressive, Joe' but no, it's not. If you look at the backlog, work is guaranteed for five- or 10-year contracts. "Worst-case scenario here is if someone cancels one of those contracts, they would have to pay CGI a one-year penalty. So if everyone cancels CGI still doubles their revenue and earnings." Still, it wasn't all sunshine and roses for everyone in high tech. Hummingbird Communications Ltd. (HUM/TSE), whose share price this week is 34.6% lower than it was during the last week of 1997, was among the losers. It closed yesterday off 40c at $30.10. Other year-over-year losers include PC Docs Group International Inc. (DXX/TSE), which was down 17.4%, and Metrowerks Inc. (MWK/TSE), which lost 54%. Certicom Corp. (CIC/TSE) of Mississauga, Ont., had an awful 1998, losing 68% of its share value year over year. But the company is poised for big things in 1999, Mr. Vejvoda says. It holds the patent on one of two standard cryptography methods and has contracts to supply major players like Motorola Inc. and 3Com Corp. with software tools enable computer users, for instance, to complete financial transactions over a wireless portable handheld device. While he expects Certicom to post losses for the first two quarters of 1999, he says the royalty cheques the company will receive should add up to a healthy profit by yearend. Mr. Vejvoda has a 12-month target for Certicom of $30. The stock closed trading yesterday down $1.20 to $13.80, rebounding from a 52-week low of $8 hit on Dec. 14. "The potential for now until the end of the year is huge." The share price of giant software maker Geac Computer Corp. Ltd. (GAC/TSE) of Markham, Ont., lost almost 16% year-over-year but he thinks the company will do better in 1999 and has placed a 12-month target of $50 on its share price. It gained 25c yesterday to close at $39.85. "Geac is one of the safer blue chips. It's Canada's largest software company. It's in the [TSE 300] index. Its earnings are real earnings. They are profitable. They have a couple of hundred million dollars in cash in the bank. Half the revenue comes from maintenance contracts which are secured," Mr. Vejvoda says. "It's a steady cash producer." Investors looking at high-tech plays, however, should be aware that 1999 could be a watershed year for the industry as it struggles to deal with two monstrous headaches: rejigging software to account for the euro and to bypass the year 2000 (Y2K) problem. How the industry deals with these issues will largely determine the success or failure of many firms. Oil & Gas Related TCPL To Spin Off Stake In Pipeline Could raise hundreds of millions by selling units of new company that holds Northern Border asset Janet mcFarland - The Globe and Mail TransCanada PipeLines Ltd. will spin off its stake in the giant Northern Border pipeline to the public, a deal that could raise hundreds of millions of dollars. TransCanada said yesterday that it has transferred its 30-per-cent interest in the pipeline to a new company, TC PipeLines LP, and will sell units of TC PipeLines to the public. It will sell 78.2 per cent of TC PipeLines and retain the remaining 21.8-per-cent ownership. The company would not disclose how much money it expects to raise by selling its stake in the Northern Border pipeline until the offering price has been determined. But a project this year, which expanded the pipeline's capacity by 41 per cent, cost $837-million (U.S.) to complete. The share offering comes at a hot time for pipelines connecting Western Canada into the lucrative midwestern U.S. market. Northern Border's expansion this year -- which extended its reach from Iowa into the Chicago area -- was the first of two projects aimed at moving gas from Western Canada to Chicago. The other is the $4-billion (Canadian) Alliance Pipeline project, scheduled to begin construction in 1999. Northern Border now supplies 20 per cent of the gas used in the Chicago area, making it a key asset of TransCanada. Spokesman Gary Davis said TransCanada does not have any specific plans for the funds it will raise from the public offering. "It's more a matter of unlocking the value of our U.S. assets." He said TransCanada also has important plans to use TC PipeLines LP to hold other U.S. investments, such as its 50-per-cent interest in the Tuscarora pipeline, which runs from Oregon to Nevada. "We've decided to establish our own limited partnership for our U.S. based assets, with Northern Border being the first asset to be monetized through the LP," Mr. Davis said. "The important thing about this LP is that we are establishing what we consider to be an excellent strategic vehicle for our U.S. assets and for our continuing activities in the U.S." The company said yesterday that it has filed a registration statement for TC PipeLines with the U.S. Securities and Exchange Commission, and will sell 15.64 million units, with an overallotment option of another 2.35 million units. The 1,560-kilometre Northern Border pipeline began operations in 1982 and extended from the Saskatchewan border to Iowa. The expansion project this year, which began delivering gas on Dec. 22, added another 392 kilometres to the pipeline and extended its reach to Chicago. The other 70 per cent of the pipeline is owned by a consortium of large U.S. energy companies operating as Northern Border Partners LP. They include Enron Corp., Duke Energy Corp. and Williams Cos. The share offerings will be underwritten by Goldman Sachs & Co., Salomon Smith Barney, Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., and PaineWebber Inc.