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Gold/Mining/Energy : Oil & Gas Price Economics -- Ignore unavailable to you. Want to Upgrade?

To: John Paquet who wrote (118)	5/11/1999 12:22:00 AM
From: Ed Ajootian	Respond to of 350

N.Y. Crude Rises as Report Shows OPEC Making Promised Oil Production Cuts N.Y. Crude Rises; IEA Shows OPEC Is Making Oil Cuts (Update1) (Adds final prices throughout, details and trader, Albright comment from 7th paragraph.) New York, May 10 (Bloomberg) -- Crude oil rose more than 1 percent, its first gain in three sessions, after the International Energy Agency confirmed that OPEC is adhering to oil production cuts pledged over the past year. OPEC met 85 percent of its promised output cuts in April, the Paris-based IEA said. A Bloomberg survey last week showed 83 percent compliance. Prices also rose after the IEA raised its forecast for global oil demand for the first time in five months. ''The IEA is one of the most-watched measures of OPEC,'' said John Kilduff, senior vice president of energy risk management at Fimat USA in New York. ''It shows OPEC is serious about these cuts.'' Crude oil for June delivery rose 28 cents, or 1.5 percent, to $18.50 a barrel on the New York Mercantile Exchange. Prices are up 79 percent from December's 12-year low of $10.35 a barrel, as cuts in output from the Organization of Petroleum Exporting Countries began to eat away at a worldwide surplus. In London, June Brent crude rose 4 cents to $16.45 a barrel on the International Petroleum Exchange. Oil prices fell temporarily during the day on news accounts of partial Serbian troop withdrawals from Kosovo. Prices rebounded after NATO said such a withdrawal would be inadequate. OPEC Cuts In a series of agreements stretching back to March of last year, the 10 members of OPEC participating in the cuts agreed to trim 4.316 million barrels a day from their output in February 1998 of 27.292 million barrels a day. While some OPEC members produced above their goals last year, prices have been surging this year on speculation that their output now is closer to targets. ''The IEA report confirms what other people have been saying,'' Kilduff said. Prices briefly fell after press reports that Yugoslavia was withdrawing some troops from Kosovo. Yet the North Atlantic Treaty Organization soon said that such a withdrawal plan wasn't enough for it stop a bombing campaign against Yugoslavia that's lasted almost two months. The NATO allies have accused Yugoslavia of human rights abuses in Kosovo. The NATO attacks increased demand for jet fuel and buoy expectations that NATO might be forced to launch a ground assault, which would mean ever greater demand for fuel. Nevertheless, some traders downplayed the extent of the war's influence on oil prices. ''Yugoslavia is not worth more than 50 cents (a barrel) for the crude market,'' said Nauman Barakat, vice president of futures investments for Prudential Securities in New York. ''The impact is psychological more than anything else.'' U.S. Secretary of State Madeleine Albright described the reported Yugoslav move as a ''half-measure,'' and vowed to continue NATO's campaign. Gasoline for June delivery rose 0.76 cent, or 1.4 percent, to 53.97 cents a gallon on the Nymex while June heating oil rose 0.63 cent, or 1.5 percent, to 43.86 cents a gallon. **************************************************************** Thanks for your thoughts. Looks like we dodged another bullet and we will be free to play with the oil stocks for another month.