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Mike Barry News

10 Sep 1999

Tightened Supply, Severe Winter Could Drive Oil Even Higher

Oil importers last week were facing the prospect of a severe winter price spike as OPEC exporters prepared to turn the screw on stringent supply restrictions. Benchmark Brent crude in London struck new 31-month highs last week at $22.30 barrel -- another 32 cent rise on top of Tuesday's 60 cent jump which took prices above $22 for the first time since February 1997. "As long as key producers give no hint of relaxing output restraint the price of Brent will probably approach $25 in the fourth quarter," said Mike Barry of London's Energy Market Consultants. "The latest price rise is certainly a vote of confidence in OPEC compliance with its output cuts," said Peter Gignoux, head of the London energy desk at brokers Salomon Smith Barney.

10 Sep 1999

OPEC Restrictions Expected To Send Oil Prices Soaring

Resurgent world oil prices will blaze towards the highest level since the Gulf War this winter as key producers stick to strict supply curbs, a Reuters survey found last week. Analysts and consultants ruled out any chance that export cartel OPEC's ministerial meeting this month might relax output limits that have already fostered a stunning price rally to 23-month highs. If the northern hemisphere winter proves harsh world benchmark Brent could balloon to post-Gulf War highs at $25 a barrel as the supply stranglehold demolishes global stocks of spare stored oil, they added. "It could go over $25 a barrel as inventories keep tightening, especially if there is a cold snap. The Y2K factor could tighten it too," said Peter Hitchens of Williams de Broe.