Impact of OPEC Target Change on Probable Resid Price Range

fyi

---------------------- Forwarded by Rockford Meyer/FGT/Enron on 01/17/2000
10:49 AM ---------------------------
From: David Rosenberg on 01/17/2000 09:12 AM
To: Rockford Meyer/FGT/Enron@ENRON, Robert Hayes/FGT/Enron@ENRON, Jack
Boatman/FGT/Enron@ENRON, Rachel Cady/FGT/Enron@ENRON, Sharon
Farrell/FGT/Enron@ENRON, James Saunders/FGT/Enron@ENRON, Denis
Tu/FGT/Enron@ENRON, John Keiser/FGT/Enron@ENRON, Robert
Kilmer/FGT/Enron@ENRON, Mike Bryant/OTS/Enron@ENRON
cc: Rod Hayslett/FGT/Enron@ENRON

Subject: Impact of OPEC Target Change on Probable Resid Price Range

OPEC, "coaxed" by Saudi Arabia, have announced a revised target of $25/bbl
for WTI. The Saudis have even agreed to help out Venezuela financially in
order to keep them from opening the spigot and dropping the price.

At the low end of the old OPEC target range of $18 to 22/bbl for WTI, Gulf
Coast 1% S prices in the low two dollars per mmbtu range would have been in
the range of reasonable probability.

The resid expectations at the low, target and high end of the WTI range are
as follows:

GC 1%S Range, $/mmbtu

With the new target, in all likelihood, GC 1% Sulfur would only rarely go
below $2.50/mmbtu.

GC 1%S Range, $/mmbtu