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

To: Platter who wrote (36662)	2/3/1999 2:39:00 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 95453

Looks like I called it right this time. Today the big move up begins. Interesting article from Britain. Looks like OPEC and non-OPEC producers may soon get together. Talks in pipeline as N Sea oil price slumps The Scotsman MOVES were under way yesterday to arrange summit talks among oil- producing countries after a poll showed that average prices for North Sea oil could fall this year to near the lowest level since production began almost 25 years ago. With no signs of an easing in the global supply glut, prices languished 9 cents down from Monday at $10.79 a barrel, more than $2.50 below the 1998 average of $13.34. The latest poll of 20 leading analysts conducted by the Reuters news agency produced a consensus that this year's average would sink further to $12.61 a barrel. This will be not far short of the average prices at which North Sea oil sold when the first fields off the Scottish coast started production in the mid-1970s. In real terms, allowing for inflation, prices 25 years ago were worth about $32 a barrel in today's money. Another OPEC poll showed that output by members rose last month by 360,000 barrels per day (bpd) to 27.8 million bpd despite demand continuing to be depressed by mild winter conditions and the economic downturn in Asia and other regions. OPEC is due to meet late next month to consider calls for production cuts in an attempt to shore up prices later in the year. Youssef Yousfi, the Algerian oil minister who is the cartel's president, said yesterday that he had started consultations with some non-OPEC oil-producing countries to arrange talks this month aimed at co-ordinating policy ahead of the formal OPEC session. The latest leakage in the OPEC quota system - intended to peg the cartel's combined output at 26.6 million bpd - did not surprise analysts, who believed some member countries were getting impatient for extra revenues to reduce budget deficits. Mike Barry, of the London-based Energy Market Consultants, predicted that 1999 North Sea prices could average $13 a barrel if OPEC members agreed to enforce the quota system and cut total output by up to 1 million bpd this year. "If they don't, prices are heading even lower," he said. Some OPEC countries are thought to be banking on the possibility that low prices will knock out some high-cost production from fields in the North Sea and North America, helping the cartel to increase its share of the global oil market. Already some companies in the Norwegian sector of the North Sea are studying plans to suspend temporarily output from smaller oilfields. Pointing out that supply growth was already curtailed as the number of rigs drilling worldwide has been halved in the last year, Mehdi Varzi, an oil analyst for the Dresdner Kleinwort Benson bank in London, commented: "The fact is that $10 oil is just not sustainable for a long period of time." (Copyright 1999) _____via IntellX_____ Publication Date: February 03, 1999 Powered by NewsReal's IndustryWatch ...back to top