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

To: marc chatman who wrote (40119)	3/16/1999 3:58:00 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

T Alex Brown Bullish On Oil Prices, Oil Stocks Mar 16 1999 9:17AM EST Dow Jones Newswires LONDON -- The revitalized oil sector received a further boost Tuesday when the top rated oil team at BT Alex.Brown put out bullish forecasts about the prospects for the oil price and for oil stocks. Analyst Fergus MacLeod, who has been ranked the top oil analyst several times in the annual Extel awards, said that last week's planned cuts - expected to be above 2 million barrels a day - in Amsterdam were way beyond anything expected and "greatly increase our confidence we will see a further significant rise in oil prices over the rest of the year." He joins other followers in anticipating a strong recovery in oil prices and oil stocks. Oil prices have recovered strongly in anticipation of large-scale cuts and briefly hit $13 a barrel last week, after last week's success in Amsterdam. Front-month Brent closed Monday at $12.56 a barrel. Oil stocks, both large and small have responded to the higher price with strong gains. The cuts - the exact figure won't be given until the OPEC meeting in Vienna, which starts on March 23 - have helped the oil price climb out of the $10 abyss and investors are returning in anticipation of higher prices. Bulls like MacLeod feel vindicated. "Our long-standing forecast of a $16 oil price by the end of the year is underpinned (barring a further global economic meltdown) and $18 in the medium term looks increasingly likely," MacLeod said in a daily note. The planned cuts alter the balance of risk in the sector and underweight positions should be closed out in the next few weeks, he said, "before spot oil prices begin to reflect the fall in previously bloated oil inventories that is increasingly likely to occur." Even after last week's rise, the oil majors' share prices are still discounting Brent oil prices of $13 to $14. "As inventories are drawn down from April/May and through the year-end, oil equities are likely to continue to outperform the market," he said. The oil exploration and production sector should benefit strongly, said BT Alex.Brown's sector analyst Caroline Cook. "The share prices of E&P stocks have historically under performed the majors except in periods of exceptional oil price recovery," she said. Service. Legal Disclaimers.