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To: BigBull who wrote (36980)	2/7/1999 9:58:00 AM
From: Platter	Read Replies (1) \| Respond to of 95453

02/07 U.S. Products Outlook-Weather, output cuts compete NEW YORK, Feb 1 (Reuters) - U.S. oil products could see a tug of war between marginal support from expectations of additional output cuts by refiners and pressure from forecasts of warm weather, traders and analysts said on Monday. They said that key to the major U.S. northeast and Gulf Coast distillates markets will be the forecasts of warmer weather, after near or above normal temperatures in recent weeks dimmed demand and left stocks sharply up on year-on-year basis. Market players will also be looking for a cue from weekly U.S. inventory data, expected to be released by the American Petroleum Institute (API) and the Department of Energy (DOE) on Tuesday and Wednesday respectively, to see if the products draws cited last week would continue to support the markets this week. Traders said that while the lesser production was likely to affect some markets, traders were also still focussed on the high overall inventories compared to the same period last year. BP Amoco <BPA.L> was the latest refiner to announce it will have less oil products output at its 160,000 barrel per day (bpd) Toledo, Ohio when it goes into a six-week scheduled turnaround starting in the first week of March, soon after a string of refiners already cut crude runs in light of deteriorating profit margins. There was also market talk that a fluid catalytic cracker at BP Amoco's 242,000 bpd Alliance refinery in Louisiana went down for maintenance on Monday, but a company spokesman refused to comment and they were not seen as buyers in the market. The run cuts have given some fuel to products markets in the U.S. Gulf Coast refinery hub, New York Harbor and the mid-Continent last week, but the near normal tempertures over the next six to 10 days in U.S. Northeast looks set to continue to cap the distillates markets. One analyst said that the run cuts hype since last week was probably over-factored by the market, adding the cuts could be somewhat helpful to the health of prices , but they aren't going to lead the market to the "promised land of higher price ranges" in the immediate future. "There's been a little bit more buying on gasoline and diesel fuel as a result (of the run cuts)," a trader said, adding players will be looking for signs of deeper production cuts for differentials to be boosted effectively. Crude oil and product futures on the New York Mercantile Exchange fell Monday, under selling pressure on oversupply worries and technicals. March crude settled at $12.37 a barrel, down 38 cents, heating oil ended at 32.50 cents a gallon, down 0.92 cent, and gasoline closed at 37.27 cents a gallon, down 1.08 cent. Traders said the market was concerned the next weekly API and DOE data may show another build in crude stocks following last week's big build of 5.4 million barrels as U.S. refineries began reducing production. But the market rallied because of large inventory draws in distillates and gasoline, brought about by the refinery cuts. Four major U.S. refiners, Ultramar Diamond Shamrock, Tosco, Sunoco and Valero have already announced economic runs cuts in a bid to boost products prices from their overall rut. Traders said the focus in the Northeast was not on the cuts in runs but on the surplus of product in the region. "The runs cuts may help but the problem is that there is just too much around," said a New York Harbor trader said. Differentials were lower on the first day of February trade, to compensate for the higher new March basis which was around 1.50 cent higher than Feb, for the gasoline and 0.26 cent for the heating oil. Prompt Feb. conventional M5-grade gasoline was pegged at a 3.00 cents discount to March NYMEX, premium V 93 gasoline was pegged steady at 1.50/1.75 cents to the screen. On distillates, prompt low sulphur diesel traded flat to the screen compared to Friday's Jan. barges at a 0.35/0.70 cent premium. Some traders expected downward pressure this week as incoming arbitrage cargoes of gasoline may face containment problems as traders scrambled to clear tanks of heating oil, putting more pressure on heat which already was a victim of a disappointing winter. "With the continuing mild weather, people want to get the No.2 oil out of their systems because of the gasoline cargoes coming from Europe," said one New York Harbor distillate trader. Traders were however unable to quantify the volume of cargoes coming in. "There are a couple of cargoes coming in, but people have made a lot of room for them," said a northeast trader who was less bullish saying there were plans to clear the tanks. The Midcontinent looks set for some gains on the diesel front, traders said, adding that it would ultimately depend on the stocks figures to be issued tomorrrow and the day after. "The low sulphur looks like it is trying to get a little stronger but it is the opposite for high sulphur as the weather is likely to be 10 degrees above normal. The gasoline seems to be the same or a little softer," one trader said. "But people are waiting for the APIs," he added. A second trader agreed, but said that the Midcontinent could actually benefit from dry weather as demand for diesel for farming purposes could pick up. Traders said the forecasts of warm weather in the New York hub would lend pressure to Gulf distillates prices, or as one Gulf trader put it: "Especially if the long range forecast is true." "It's nice and sunny down here, so if the New York reports hold true, there will be a lot of pressure on distillates," he added.

To: BigBull who wrote (36980)	2/7/1999 11:26:00 AM
From: Crimson Ghost	Respond to of 95453

Big Bull: With money supply growth booming world wide global economic growth will pick up this year, with non-Japan Asia coming on especially strong. Consequently oil prices are sure to begin an uptrend before long, although the strength of that uptrend will depend heavily on what OPEC does next month. I see OSX climbing to somewhere between 60 and 75 this year depending upon OPEC. I suspect some of these gains will be given back later in 1999 as the overall stock market takes a steep hit. But I do expect the OSX to hold up relatively well during the next stock selloff. The really explosive move in the OSX should occur in the year 2000 after the stock market bottoms out and people recognize that a new secular bull market in energy is underway. New records before the next presidential election would not surprise me at all.