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Gold/Mining/Energy : Tusk Energy (TKE) -- Ignore unavailable to you. Want to Upgrade?

To: Michael M. Cubrilo who wrote (1060)	3/10/1999 7:50:00 PM
From: Robert McCullough	Read Replies (1) \| Respond to of 1207

Maybe...Some Good News... March 10, 1999 -------------------------------------------------------------------------------- Crude-Oil Futures Jump Up As Oil Producers Plan to Meet By MATTHEW F. GALLAGHER Dow Jones Newswires NEW YORK -- A likely meeting of oil officials from the Organization of Petroleum Exporting Countries' Saudi Arabia and Venezuela and non-OPEC Mexico sent oil futures soaring at the New York Mercantile Exchange Wednesday. News that the officials will meet in the next 24 hours in Amsterdam to discuss a further cut in oil production launched the April oil contract 84 cents higher to $14.69 a barrel, the highest point for oil futures since Oct. 7 last year. Total volume of 226,707 was only about 2,000 below the record for the contract. The new output level, if agreed to, will likely be ratified at OPEC's official meeting on March 23. Oil stocks jumped ahead on the news, as Exxon surged 3 3/8 to 73 5/16; Chevron gained 3 5/16 to 83 1/4 and Texaco leapt 4 1/2 to 54 1/8, all on the New York Stock Exchange. A meeting in March 1998 of ministers from the same three countries resulted in the OPEC/non-OPEC output reduction pact of 1998, which committed the world's major oil suppliers to cut output by over 3 million barrels a day to support sagging oil prices. News of that deal sparked the biggest single-day rally in oil futures since the 1990 Iraq invasion of Kuwait. On March 23, 1998, the day after the news broke, May oil ran $2.89 a barrel higher and settled up $1.90 at $16.51. The gains were short lived, though. Oil prices proceeded to fall to a 12-year low of $10.35 by year's end, sucked down in large part by the downward spiral in Asian and other emerging market economies and their demand for oil. Most industry analysts agreed that another 1.5 million to 2 million barrels a day in cuts would be needed to keep up with that slide in world demand. The news Wednesday that just such a cut -- one that may see Saudi Arabia alone cut another 500,000 barrels a day -- was in the works sent the market scrambling higher. Oil prices had already climbed by nearly $3 a barrel off a prominent low hit on Feb. 17 just on hype of a new cut. The reality of another drop in output still needed to be built into prices, an energy analyst said. 'This looks for real," said Bill O'Grady, analyst with A.G. Edwards in St. Louis. "If you look at the players involved you see a serious development." But as with any OPEC news, the doubts swirled. "It's one thing to agree to make cuts, and altogether another thing to actually implement them. OPEC is better at promising output cuts than it is at adhering to them," cautioned Peter Beutel, an energy analyst with Cameron Hanover, an energy market research firm in Connecticut. Indeed, the latest OPEC production data, for February, showed the group only 77% compliant with last year's pledge. That number has been significantly lower in months past. Several analysts suspect compliance with an additional cut will be worse, at least in the first few months of implementation, noting that OPEC compliance was horrible the first few months of last year's agreement. John Kilduff, senior vice-president of energy risk management at Fimat USA Inc., in New York, said the market is now vulnerable to severe disappointment if the Amsterdam meeting doesn't yield the substantial output agreement the market is looking for. Further disappointment looms later, if OPEC is found to be non-compliant with a new agreement.