SPOT HEATING OIL AND DIESEL HIT ALL TIME HIGHS-OPIS It's official. Spot prices for heating oil and diesel that buyers are paying today in the New York Harbor spot market and at terminals in the Middle Atlantic and New England have surpassed the previous highs seen only during the Persian Gulf War. A superheated market this morning shows no signs of a cool-down with diesel, heating oil, and kerosene now valued more than 50cts gal higher than the going prices less than two weeks ago. These numbers are changing drastically almost minute-by-minute, but just after lunchtime, New York heating oil or diesel was valued at $1.25 gal.

That's about a dime higher than where prices peaked during Operation Desert Shield in the Fall of 1990. Jet fuel prices in New York have hit $1.35 gal and kerosene is valued at $1.40 gal. Jet fuel numbers haven't yet reached their all-time high of $1.45 gal reached in October 1990, but the day isn't over, and traders are raising bid/asked prices in increments of 5-10cts gal. Northeastern suppliers admit that they are concerned about meeting the demand of the market over the next 10 days. Colder than normal temperatures are forecast for the period, and there are widespread outages at terminals from Newark and Philadelphia north to Portland and Bangor, Maine. Rack suppliers and heating oil retailers do not believe that any homeowners or end-users will run out of fuel, but they believe that there could be retail diesel outages--suppliers are dyeing their diesel so it can be used in the heating sector.

The northeastern price surge has led to some unbelievable price discrepancies throughout the country. Whereas diesel costs $1.25-$1.30 gal on the New England wholesale markets, prices in the Midwest are at less than 80cts gal. Trucking companies taking routes from the southeast or Ohio Valley to New England may find that truckstop prices 30-40cts gal higher in the northeast because of the difference in wholesale costs. - Tom Kloza, tkloza@opisnet.com

-- Andy (2000EOD@prodigy.net), January 21, 2000

Answers

Could the rise in the oil market be due to the same kinds of factors that cause the rise in the internet stocks (a flurry that starts to have its own momentum)? If so, shouldn't the people predicting the stock market will collapse also be expecting this oil.bubble.com to pop too?

-- Curious (zz@seanet.com), January 21, 2000.

A post on www.kitco.com referenced Harry Schultz Newsletter quoting a power outage in the Middle East affecting oil supply.

I'm searching fvor additional details.

-- Bill P (porterwn@one.net), January 21, 2000.

ood question Curious. The answer is definitely no, but I'll let the experts answer that one.

BTW Bush senior is sniffing around in Kuwait.

Richardson is keeping damn quiet, last i heard he was sniffing around in Saudi.

Oh yeah, the Ukraine has just deaulted on their debts. that brings them into line with Ecuador and Pakistan. Force Majeure in Venezuela, who's next???

-- Andy (2000EOD@prodigy.net), January 21, 2000.

Curious,

No.

-- J (Y2J@home.com), January 21, 2000.

Sheesh!!!!!!!!!!!! I feel bad for the independent truckers out there such as my ex bro in law who recently purchased his own rig. Also those poor folks who bought the gas guzzlers. With out sounding to dumb, is this price increase really due to the y2k? or are the arabs getting greedier? I am serious.

-- nochance (no@aol.com), January 21, 2000.

Bill, any idea on what the latest word is on oil/generally from Harry S. ??? thanks.

-- Andy (2000EOD@prodigy.net), January 21, 2000.

OK, I'm sorry for being a wise guy. If you don't have oil to heat with in the winter in the cold parts of this country, you freeze to death. If you don't have an internet stock in your portfolio, you won't freeze to death. It basically is the difference between a commodity that is needed versus an investment(loose definition) that is not.

-- J (Y2J@home.com), January 21, 2000.

Harry Schultz

http://www.kitcomm.com/comments/gold/2000q1/2000_01/1000121.120115.gia nni_di.htm

-- Bill P (porterwn@one.net), January 21, 2000.

Thanks Bill -

Date: Fri Jan 21 2000 12:01 Gianni Dioro (Harry Schultz on Oil) ID#437218:

-

For now, we'll say that OIL is still the Achilles' heel, as we've warned before. Things are HAPPENING right now. Pennzoil closed one refinery. Iraq lost 75% of its oil production. A Y2K power outage in the middle east is affecting oil production. And many more such occurrences. Many oil men are being mysteriousie, refusing to comment.

As PROOF that these events are serious, U need look no further than the price of crude oil, heating oil & gasoline. Crude hit a multi-yr high on Friday, January 14in the face of a mild/warm winter when prices normally sell off. Someone knows something. The price tells U most of what U need to know.

-- Andy (2000EOD@prodigy.net), January 21, 2000.

Y2J I understand the difference, but in this day of day traders and perceived instant millionaires, momentum can feed on itself. Maybe the trading is due to people who know what is going on behind the scenes, but maybe it's people who want to jump on the next big thing. How do we know?

-- Curious (zz@seanet.com), January 21, 2000.

Fair Use:

FOCUS-Oil fear hits Europe stocks, yen strong (Updates after close of European bourses)

porterwn@one.net), January 21, 2000.

FOCUS-Oil fear hits Europe stocks, yen strong (Updates after close of European bourses)

By Leonard Santorelli

LONDON, Jan 21 (Reuters) - Fears of spiralling oil prices, sparked by a tough statement by key OPEC ministers, hit share prices in late European trade on Friday, with Germany's Dax index among the main victims.

Oil went through the $27 a barrel mark for the first time in nine years after ministers from Iran, Algeria and Libya agreed to propose a six month extension of existing output curbs.

The yen strengthened against the dollar and the euro as scepticism grew whether Saturday's meeting of the G7 financial superpowers would voice concern about the effect of the strong yen on Japan's fragile economic recovery.

---------------------------------------------------------------------- ----------------------------MARKET PRICES AT 1651

---------------------------------------------------------------------- ----------------------------MARKET PRICES AT 1651

GMT ----- EURO 1.0082/86 YEN 104.86/91 STERLING 1.6494/04

GOLD $288.90/289.40 +1.39 (pvs PM fix) BRENT $26.78 +0.68 FTSE 6346.3 -2.40 CAC 5,681.32 -28.42 DAX 6992.75 -119.91 ---------------------------------------------------------------------- ---------------------------- ``Higher oil prices are not helping,'' said Guy Truicko, portfolio manager at Unity Management in Garden City, New York, as Wall Street turned negative on the OPEC news.

``Higher oil prices means higher inflation, putting more pressure on the Fed to do something about interest rates.''

The Dax (^GDAXI - news) ended 1.69 percent lower and Paris' CAC index (^CAC - news) was off 0.5 percent, but in London, capital of oil producer Britain, the FTSE (^FTSE - news) escaped with a fall of just 0.04 percent.

Telecoms shares were among the weak performers in Europe in afternoon dealings.

Mannesmann AG and would-be acquirer Vodafone Airtouch Plc (quote from Yahoo! UK & Ireland: VOD.L) ended respectively three and five percent lower as investors reacted to the German company's steadfast opposition to a merger.

In Frankfurt shares in heavyweight Deutsche Telekom AG fell 3.5 percent amid reports the company had told analysts its profits would be disappointing in 2000.

``Telekom told analysts in the United States last night that profits will be down 50 percent this year,'' one trader said. Telekom could not immediately be reached for comment.

Among the bright spots, Metro AG rose 2.27 percent following a report in the Financial Times that it was considering a merger with UK-based retailer Kingfisher Plc (quote from Yahoo! UK & Ireland: KGF.L), up nearly three percent.

London was helped by a rebound in the banking sector.

The best gainers in the FTSE 100 index included banking groups HSBC Holdings (quote from Yahoo! UK & Ireland: HSBA.L), Standard Chartered (quote from Yahoo! UK & Ireland: STAN.L) and Abbey National (quote from Yahoo! UK & Ireland: ANL.L), all three having suffered sharp falls on Thursday.

BP Amoco (quote from Yahoo! UK & Ireland: BPA.L) climbed 3.78 percent, boosted by exceptionally strong results from proposed acquisition Arco (NYSE:ARC - news) and fresh hopes the planned purchase can avoid prolonged litigation.

In Paris, TotalFina , up 1.7 percent and STMicroelectronics , up 3.4 percent, lent support.

Traders said the French market seemed to be increasingly ``de- connected'' from the Nasdaq, after a honeymoon with the U.S technology-heavy index lasting months.

``The market is very volatile .... But we can see we are no longer following the Nasdaq's trend,'' one trader said.

YEN ADVANCES ON G7 UNCERTAINTY

In currencies, the dollar and euro fell against the yen amid uncertainty about the G7 meeting in Kyoto.

The G7 finance ministers were seen unlikely to step up their rhetoric on currencies, traders said. At their last meeting in September, they said only that they shared Japan's concern about the yen's export- crippling strength.

``It's looking obvious to the market that what will come out of the G7 would probably be nothing more than a restatement of what was out in September,'' said Steve Barrow, currency strategist at Bear Stearns in London.

``Even if we were to get something surprisingly aggressive from the G7, what does it mean?'' he said.

``The G7 has 'shared' Japan's concern about the yen since September, but no other central banker (besides those in the Bank of Japan) has dipped into his pocket to intervene.''

The yen rose around one percent on the day against both the dollar and the euro. Dollar/yen was around 104.9 after falling to two-week lows below 104.60, while euro/yen (EURJPY=> fell below 106.

Yen buying was initially triggered after Tokyo's Economic Planning Agency chief Taichi Sakaiya said a stronger yen was not necessarily detrimental to the Japanese economy.

In debt markets, Euro-denominated government bond yields were higher as stronger-than-expected French industrial production data piled further pressure on the market.

U.S. debt futures were mixed, with activity below the moderate to heavy levels seen earlier in the week.

-- Bill P (porterwn@one.net), January 21, 2000.

Curious,

There are some articles in various oil threads that state that there are areas in the northeast with no product right now. I am not saying that oil is going to $100 dollars a barrel. I am just saying that there is a fundamental(supply > demand) reason for these commodities to be going higher in price.

The question seems to be is demand overtly strong, or is supply weak? Since the northeast has had a mild winter to this point, I would say that supply is weak. That begets the question, why(2K)?

I don't know the answer, but the scenario is different than .com stocks, mainly because of the true underlying value of a commodity like oil, compared to the pie in the sky hopes of riches from the internet.

-- J (Y2J@home.com), January 21, 2000.

Curious, The other difference between this stock market bubble and the current NE heating oil rally is the former is a mania bubble and the latter is escalating on truely tight underlying fundamentals. OK, they are squeezing it but thats part of free markets.

-- Downstreamer (downstream@bigfoot.com), January 21, 2000.

Is that the highest price ever in real terms? That is, does it take into account (e.g.) USA inflation and/or growth?

-- Servant (public_service@yahoo.com), January 22, 2000.