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

To: SliderOnTheBlack who wrote (35892)	1/27/1999
From: Box-By-The-Riviera™	Respond to of 95453

Tuesday January 26, 9:51 pm Eastern Time FOCUS-Oil prices wilt as refiners cut runs LONDON, Jan 26 (Reuters) - World oil prices stuttered lower on Tuesday as puny refining margins sapped crude demand still further. International benchmark Brent settled 21 cents lower at $10.64 a barrel in London, little more than a dollar above 12-year lows struck last month. Brent so far this year has averaged just $11.08 a barrel, over two dollars less than last year -- itself some six dollars worse than 1997. Yet cheap crude is failing to resuscitate margins for refiners beset by stagnant demand. Europe's most sophisticated plants have seen margins crumble to an average of less than 40 cents a barrel, while simpler complexes see a meagre eight cent return. ''We're definitely quite worried by the margins situation,'' said a senior refining official at Royal Dutch/Shell. ''We're on the verge of cutting production of marginal barrels.'' Refinery run cuts are already in evidence in the United States and Germany. Analysts say the picture is only likely to get worse. ''Refiners will begin to scale back crude purchases in anticipation of weaker spring product demand. After February warmer weather will reduce demand dramatically,'' said a report by Washington-based Petroleum Finance Company. Downward pressure increased after forecasts that slower refinery runs and rising crude imports in the huge U.S. market had bulked out swollen oil inventories still further. Amid the bearish backdrop, the trading community shrugged off renewed tension in key producer Iraq, which saw Washington broaden its rules of engagement in Iraq's two no-fly zones. Amid the fourth day of encounters in the zones between U.S. and Iraqi forces, U.S. jets hit military targets in the north on Tuesday, a day after 11 civilians were reported killed in raids on the south. The clashes are becoming a cat-and-mouse game as Baghdad voices defiance at Western control of the airspace above the top and bottom thirds of the country But Iraqi oil exports of some two million barrels per day have almost entirely escaped disruption from the clashes. Prices in dollars per barrel: Jan 26 Jan 25 (close) (close) IPE March Brent $10.64 $10.85 NYMEX March light crude $12.08 $12.44 ((Andrew Mitchell, London newsroom, +44 171 542 5024, fax +44 171 542 4453)