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

To: diana g who wrote (42545)	4/18/1999 5:42:00 PM
From: articwarrior	Respond to of 95453

Good Question diana "How will the oil price rise above OPEC's upper limit with the Saudis et al ready to open the taps to keep the price from going too high?" First let me begin by stating that Saudi has its constituents which derive quite a healthy chunk of their living standards by the returns from the oil patch. They have interwoven their prosperity into the price of a barrel of crude. If current production quotas are held to and the price of oil starts to climb above 20 per barrel it won't be Saudi who tries to lower their return per barrel that is for sure. The rising price of oil will in and of itself be further justification for keeping strong alliances between all third world producers to keep the status quo. But the issue is not price as much as production quotas that will affect what the eventual price will be. As long as production quotas remain fairly close to what is agreed then we have no where to go but up. Second if you closely examine where the spike in production happened a substantial portion of it came from IRAQ. They churned out the greatest amount of oil ever. Iraq's infrastructure as pertains to their oilfields has been strained and the field life shortened dramatically because of this foolish act. I think aggie can provide more light on this point. Since IRAQ has failed in their attempt to crush the US oil machine they will go into a mode of defense of resources. Keeping their production at quotas to maintain their allocated share. Next, and this is very important...The elements for Asia's recovery are such that OPEC and the other non-OPEC countries will have an agreed upon expansion plan by this time next year. The wounds of this last years devastation in oil price have not even begun to heal and I believe will remain fresh in all oil producers minds for at least another year. This will help ensure honor among "Thieves" Regards Artic