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

To: Tomas who wrote (45828)	6/3/1999 7:59:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Persian Gulf Oil Producers See Prices Rising After Summer Demand Lull Ends Kuwait, June 3 (Bloomberg) -- Persian Gulf oil producers, accounting for 50 percent of OPEC's output, said the 13 percent decline in prices since May 5 is temporary and oil will rise again once the summer lull in demand is over. A slump in demand from refiners has caused oil prices to fall by more than $2 a barrel since May 5 to hit a two-month low of $14.55 on Tuesday. Prices had risen from March until May on anticipation that supplies will be restricted in the future after the Organization of Petroleum Exporting Countries' and four other producers pledged to reduce world output by more than 5 million barrels a day. ''It's summer time! We are just happy that prices are holding at $14-$15 a barrel,'' Talal al-Yacout, a spokesman for Kuwait's oil ministry said. ''Our minister is optimistic prices will pick up again after the summer,'' provided producers comply with their promised output cuts, he said. Oil demand typically weakens in the northern summer when the need for heating oil is at a minimum and refiners have normally built stockpiles of gasoline in preparation for increased driving during the summer months. This year, spring demand for crude has been curtailed because prices of refined products such as gasoil have risen more slowly than those of crude, prompting refiners to cut purchases of crude as profit margins have slimmed. European refiners' profit from making a barrel of gasoil, or heating oil, from a barrel of crude oil fell to 59 cents on Thursday, the lowest return since oil futures began trading in London in 1988. The one-year average is $2.50 a barrel. Crude oil for July delivery recovered slightly in London yesterday to close at $14.88 a barrel on London's International Petroleum Exchange, still well below the high of $17.05 reached earlier this month. Saudi Arabia Saudi Arabia, the world's biggest oil producer is confident that oil prices will improve. ''The fundamentals are still sound,'' said a spokesman for the Saudi oil ministry, and added, that ''we are determined to do whatever is needed to improve prices.'' OPEC, which pledged to reduce world output by 4.3 million barrels a day in a series of agreements stretching back to April 1998, made 91 percent of their promised oil output cuts in May as they implemented a plan to eliminate an oil glut and boost prices, according to a Bloomberg survey. Production from all 11 members of OPEC totaled 25.96 million barrels a day in May, down 370,000 barrels from a revised 26.33 million barrels a day in April, the survey of producers, oil companies and analysts showed. The U.A.E.'s oil minister Obeid bin Seif al-Nasseri said he expected the market to improve in the ''near future,'' reported the Saudi-owned Al-Hayat newspaper. ''The easing of the economic crisis in Southeast Asia will lead to an improvement in demand,'' he said. Persian Gulf oil producers have set a target range for oil prices at between $18 and $20 a barrel for Brent crude, the benchmark grade traded on the IPE.