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

To: BigBull who wrote (41814)	4/7/1999 10:43:00 PM
From: BigBull	Read Replies (2) \| Respond to of 95453

The DOE is now predicting $18 bbl WTI by December. Says 564,000 bpd US production cut. Who cares if Venezuela cheats around the margin? Thats one sh_tload of oil off the market, boys and girls. Energy News Wed, 7 Apr 1999, 10:29pm EDT Gasoline Prices to Peak at $1.18 a Gallon in May, DOE Says Washington, April 7 (Bloomberg) -- U.S. gasoline pump prices should peak for the year in May, following a gain in crude oil prices and a spate of West Coast refinery problems, the U.S. Department of Energy said. Prices will peak at a national average of $1.18 a gallon, 11 percent higher than last year, according to the Short-Term Energy Outlook from the Energy Information Administration, a division of the DOE. The average summer price in the U.S. will be $1.13 a gallon, up about 10 cents from the year before. Four California refineries had problems that from mid- February onward caused U.S. inventories to tighten as supplies were transferred to the West Coast. Crude oil prices rose 37 percent in March, boosted by an agreement by oil-exporting countries to cut 2.1 million barrels a day of output, or 2.7 percent of world supply. ''Typically, prices peak in June, but it's going to peak in May'' this year, said David Costello, the economist in charge of the report. Gasoline prices should tail off after May to average $1.13 a gallon for the summer, Costello's report said. In January, before the exporters pledged to cut production, the EIA predicted that prices would peak at $1.08 a gallon. Gasoline demand is expected to be up 2 percent, aided by a 2.1 percent increase in highway travel, the report said. As before, demand this summer is expected to be a record. Cuts Take Hold Crude oil prices will rise to $18 a barrel for benchmark West Texas Intermediate by December, as the production cuts by the Organization of Petroleum Exporting Countries and other exporters take hold. U.S. domestic production over the past year has plunged 564,000 barrels a day, or 9 percent, to a 49- year low because of low prices. ''We're going to have a real decline in world production since the Gulf War, which should really cut into the surplus,'' Costello said. The EIA's Short-Term Energy Outlook also forecast that: -- Imports will rise to 54 percent of U.S. total petroleum consumption, up from 52 percent in 1998. -- Natural gas spot prices will stay under $2 per 1,000 cubic feet (or about $2 per million British thermal units) until the fourth quarter, unless there is an unusually hot summer. Prices should remain low because gas in storage is at a seven-year high. -- Electricity demand should grow at a slower-than-normal 1.4 percent rate as temperatures are expected to be more moderate than last year, indicating lower air-conditioning demand. Average demand growth was 2.4 percent between 1990 and 1998. -------------------------------------------------------------------------------- © Copyright 1999, Bloomberg L.P. All Rights Reserved.