Contrary to recent analyst expectations, average West Texas Intermediate (WTI) crude prices for 2000 will likely range between the low- and mid-$20s-not $19 to $20-says Charles T. Maxwell, senior energy analyst for Weeden & Co., a brokerage firm in Greenwich, Connecticut. "OPEC is going to delay its response to higher [crude] demand, leak a little oil around the edges from the few members that can provide the extra barrel, and later in the year raise production quotas only modestly," the analyst contends. He believes that any increase in the cartel's output will be somewhat less than the 1.5 million barrels per day required to bring world supply and demand into balance. Maxwell notes that OPEC's three most powerful exporters-Saudi Arabia, Venezuela and Iran-are in political and economic accord about supporting relatively high oil prices, and that as long as this triumvirate works in accord, the rest of OPEC will support its efforts. "Success in lifting the price of oil from $11 per barrel in December 1998 to more than double that price today has given confidence to OPEC's members that they are on track to restoring their dangerously depleted financial resources," he says. "To abandon their policies now would be to endanger their future political viability in a way that none of these governments can afford." -Brian A. Toal The U.S. oil and gas industry isn't putting enough straws in the ground, contends a pair of oilfield-service analysts. "We believe that domestic natural gas reserve additions and wellhead production aren't increasing at a rate sufficient to accommodate the growth in U.S. [natural gas] consumption," says Jeffrey R. Freedman, managing director and oilfield service analyst for Prudential Securities in New York. Houston-based Matthew D. Conlan, another Prudential oilfield service analyst, cites a recently released U.S. Energy Information Administration (EIA) study which indicates that, in 1998, the ratio of reserve additions per successful well fell to the lowest level in more than a decade. "We believe this confirms that average field sizes are decreasing, and that despite major improvements in oilfield technology, proved gas reserves in the U.S. aren't being maintained," says Conlan. "With drilling activity having declined further last year, we would expect proved gas reserves at year-end 1999-to be reported at the end of 2000-to witness further erosion." According to the recent EIA study, proved domestic gas reserves at year-end 1998 stood at 164 trillion cubic feet (Tcf) versus 167.2 Tcf in 1997. Says Freedman, "The results of the 1998 survey, and trends last year, strongly suggest that the U.S. natural gas market is likely to be supply constrained this year and next, and that much higher levels of drilling activity will be required to maintain reserves and to satisfy growing gas consumption, which should increase 3% in 2000 and 2001." -Brian A. Toal