IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
312-207-1800(March 14, 2000) ENERGY COMPLEX: Consensus has not been reached yet among OPEC members on the issue of whether or not the cartel will decide to maintain the current production output levels or to increase them. Countries such as Iran, Oman and the United Arab Emirates oppose a plan to hike the outputs based on the argument that heating oil demand will be tapering off as the cold season subdues in the northern continents. It is rather unlikely that these countries will want to be lenient in following major oil producers such as Saudi Arabia, Venezuela, and Mexico should they want to increase production levels.
World oil stockpiles are at their lowest levels in 29 years. Even if OPEC is willing to increase production levels, the cartel might only increase production by 1.5 million barrels per day. Unfortunately, this increase would only begin to affect the market beginning in late May 2000. The anticipated early summer driving season will begin with a big hike in gasoline prices.
In April crude oil, resistance levels are set at 32.45 and 33.24. Support levels are pegged at 31.44 and 31.08. Volume and open interest are decreasing, indicating that a top might be near.
RECOMMENDATIONS--Consider long April 2000 crude oil at 32.04. If filled, then set protective sell stop at 31.08. Set the objective target to sell at 33.24.
Benny Tjahjono
Hosted by:
CONSENSUS, INC. AND INVESTORS
CO-OP
1737 McGee
Kansas City, MO 64108
(816) 471-3862
editor@consensus-inc.com