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

To: SliderOnTheBlack who wrote (44547)	5/11/1999 11:53:00 PM
From: Captain James T. Kirk	Respond to of 95453

RISING OIL PRICES have sent oil stocks soaring upward as fast as a new oil gusher. The bonanza has hit owners of every kind of oil stock — from the big oil giants to the oil service companies. But some analysts who follow the sector say these stocks may have shot up too high, too fast. “Expectations are very, very high,” said Angie Sedita, who covers oil service companies for A.G. Edwards. “It's built into oil prices and in oil services stocks. So they have moved far ahead of reality.” Several analysts predict that both the oil services stocks and the big integrated oil stocks will likely see a large, short-term correction in the next few months. That's because many of these stocks have shot way ahead of their industry group. For example, big oil stocks are up by 16 percent year to date. But Texaco, the target of a takeover by Chevron, is up by 28 percent. Both Unocal and Conoco have gushed upward by 45 percent since January. Gushing Prices Oil stocks have been big gainers so far this year. But while these and other stocks may pull back in the short term, many analysts agree that oil shares will likely keep rising over the next year. “We could see come pullback in oils stocks,” said Fadel Gheit, who covers major oil stocks at . “But I've told my people this is a buying opportunity when oil prices and oil stocks come down 2, 3 to 5 percent.” The big reasons: rising oil demand is coming from the U.S. and Asia. At the same time, the supply of world oil is slowly shrinking, thanks to the agreement of the OPEC oil cartel in March to cut production. The Paris-based International Energy Agency reported Monday that OPEC members had complied with the latest output curbs, which came into effect in April, at the rate of 85 percent. “Instead of a surplus of a half-million barrels that was forecast only six month ago, now the forecast is a deficit of a million barrels a day,” said Gheit. “So we will have a tighter market by the end of 1999.” Nonetheless, Gheit says oil prices cold swing wildly between $15 to $20 a barrel over the next year. That price pressure has analysts looking for merger mania to continue in the oil patch. Gheit says companies like Occidental, Philips Petroleum and Unocal are likely merger partners.