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

To: BigBull who wrote (43114)	4/23/1999 2:53:00 PM
From: BigBull	Respond to of 95453

DoomBerg - at it again - Either Yamani's doing the George Stephanopolis Spinster Shuffle, or he's losin' it. This guy was singing a different tune just a month ago. What is this busines about a 2% drop in todays oil price. I could be wrong, but the last time I looked it still over 18. But I'm 20 minutes delayed, so what do I know? Energy News Fri, 23 Apr 1999, 2:36pm EDT Crude Oil Falls on Question Whether Rally Justified (Update1) Crude Oil Falls on Question Whether Rally Justified (Update1) (Adds background on inventories in 6th paragraph; quote from former Saudi oil minister in 9th-10th paragraphs; background, quote on European jet fuel demand in final paragraphs.) New York, April 23 (Bloomberg) -- Crude oil fell 2 percent, retreating from a 16-month high, amid skepticism that production has dropped enough to justify a 50-percent rally this year. While oil producers say they will reduce output by 2.7 percent, independent verification of the cuts won't be available until May. The evidence available now, U.S. inventory levels, shows that stockpiles are little changed from a year ago and 2 percent higher than they were two months ago. ''We haven't seen any effects from the OPEC cuts yet,'' said Tom Bentz, senior vice president-energy at Cresvale International LLC in New York. Crude oil for June delivery fell as much as 36 cents, or 2 percent, to $17.82 a barrel on the New York Mercantile Exchange, the biggest one-day drop in two weeks. In London, June Brent crude oil fell as much as 33 cents, or 2.1 percent, to $15.80 a barrel on the International Petroleum Exchange. U.S. crude inventories have risen since the rally began, according to the American Petroleum Institute. Inventories last week were at 340.63 million barrels last week, up 8 million barrels over oil in storage in the week ended Feb. 19, the week the rally began. Saudi Arabia led the Organization of Petroleum Exporting Countries and such independent producers as Russia and Mexico in pledging to pump less oil to reduce a worldwide glut. The agreement, made in March, took effect this month. OPEC's record in adhering to output reductions promised last year was spotty. OPEC members met 78 percent of those cuts in March, according to Bloomberg estimates. Because exploration for oil has gotten cheaper, and demand is lagging, many countries have excess capacity. High prices may therefore not be sustainable, some analysts said. ''The present high price of oil seems like a passing phenomena,'' said Sheikh Zaki Yamani, former oil minister of Saudi Arabia at a conference in London. ''We have Iraq that can come back to the market. We have technology. We have what we call non-compliance (with quotas from the Organization of Petroleum Exporting Countries) - we don't call it cheating anymore. ''All these factors will have an impact. If this situation will last for more than two years, non-OPEC production will come back to the picture and then we will see then how OPEC handles the oil crisis.'' Jet Fuel Demand Prices have not fallen farther, traders said, in part because of anticipation that demand for jet fuel will rise as air strikes intensify in Yugoslavia by the North Atlantic Treaty Organization. NATO forces are attacking Yugoslavia to stop the expulsion of ethnic Albanians from Kosovo. The strikes have boosted jet fuel consumption by 7 percent at a time when some refineries in the U.S. and Europe have closed temporarily for maintenance or been damaged by fires. ''NATO is buying jet fuel through August or September,'' said Jason Chartrand, a trader at GSC Energy Corp. in Atlanta. ''They're not buying that to play the market. They're going to use the stuff.'' Jet fuel prices are soaring in western European markets since the air strikes began. The premium of European kerosene jet fuel prices over IPE gasoil futures has doubled over the past month, according to Bloomberg Energy Service figures. Gasoil for June delivery on the IPE was recently unchanged at $133.50 a metric ton. -------------------------------------------------------------------------------- © Copyright 1999, Bloomberg L.P. All Rights Reserved.