Legislature(1997 - 1998)
01/21/1998 09:10 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
21 January 1998
9:10 A.M.
TAPES
SFC-98, Tape 2, Sides A and B
CALL TO ORDER
Senator Drew Pearce, Co-chair, convened the meeting at
approximately 9:10 a.m.
PRESENT
In addition to Co-chair Pearce, Senators Sharp, Phillips,
Donley, Torgerson, and Adams were present at the meeting.
Also present: Wilson Condon, Commissioner, Department of
Revenue; Charles Logsdon, Chief Petroleum Economist,
Department of Revenue; Senator Jerry Ward; Senator Rick
Halford; Mike Greany; Dave Tonkovich, Fiscal Analyst,
Division of Legislative Finance; Clark Gruening; aides to
committee members and other members of the Legislature.
Via teleconference: Ann-Louise Hittle, Director, World Oil
Team, Cambridge Energy Research Associates.
SUMMARY INFORMATION
^OVERVIEW: PETROLEUM PRICE FORECAST
Co-chair Pearce announced that there would be a work
session on results-based budgeting with Craig Holt. She
noted that childcare programs would be used as an example
of going through the process of developing a results-based
budget. On Friday morning there would be a review of the
current and projected state employment situation by the
Department of Labor. There would then be a report by Ross
Kinney of the Department of Revenue (DOR) on the state of
Constitutional Budget Reserve (CBR), the Office of
Management and Budget (OMB) would provide an update, and
Commissioner Boyer would provide a status report on the
collective-bargaining contracts.
WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE,
provided introductory remarks to the presentation on the
petroleum price forecast. He stated that DOR staff had
worked with professional assistants from the Department of
Natural Resources (DNR), the Department of Labor (DOL),
OMB, and economists from the University of Alaska to
complete the annual long-term price forecast in early
November. Since then, the Alaska North Slope (ANS) spot
price for deliveries on the West Coast had dropped to
around $5 per barrel. Instead of the $18.11 per barrel
average ANS delivered price forecast for FY 98, the
department believed the average price for the current year
would be $16.65 per barrel, a reduction of $1.50 per
barrel.
Commissioner Condon reported that the corresponding
reduction in unrestricted general funds for the current
fiscal year would be approximately $131 million, or less
than the November forecast. For FY 99, the department had
forecast an ANS price of $18.22; the fall forecast would
use the quoted futures price for WTI [West Texas
Intermediate] and make the appropriate quality adjustment.
The ANS price for FY 99 currently would be $16.45 per
barrel, or $1.75 below the forecast; the resulting
reduction would be about $161 million in general fund
revenue.
Commissioner Condon noted that the state had learned to
live with volatility in the crude-oil markets over the past
twenty years. Four years prior, the ANS price was $11 per
barrel. He believed the real question facing the state was
whether the dip in price being experienced represented the
fundamental change in the market that had been experienced
for the past decade.
Commissioner Condon pointed to the first chart ("ANS-WC,
Nominal $'s, 6-87-12/97, 127 months") in the handouts (copy
on file) as a depiction of the market for the past ten and
one-half years; 80 percent of the time, prices fell within
the range of about $14 per barrel to $20.50 per barrel. He
explained that the squiggly line on the chart represented
the rolling twelve-month average of ANS prices; at any
point time, the number was an average of the previous
twelve months (delivered prices on the West Coast).
Commissioner Condon explained that the second chart
("Distribution of ANS West Coast Spot Prices") represented
the average monthly price for each month for the same time
period covered in the first chart, but broken down into
$0.50 intervals by frequency. He underlined that the
monthly prices were distributed in a classic bell curve.
The most frequent interval had been $17.00 to $17.50 per
barrel, and the average price over the same ten and one-
half year period had been about $17.35. He stressed that
over the time period, the trading range for ANS crude
delivered on the West Coast had fallen generally in the
range of $15 to $18 per barrel.
Commissioner Condon offered that the question was whether
there had been a longer-term change in the trade range. He
stated that the department did not think so, but the
question would be addressed later in the presentation.
Senator Phillips queried the average price per barrel over
the past twenty years. Commissioner Condon responded that
the average price over the past twenty years was about $21
per barrel.
CHARLES LOGSDON, CHIEF PETROLEUM ECONOMIST, DEPARTMENT OF
REVENUE, directed the committee to the third page of the
handout, "ANS West Spot Price (May 1987-Jan 1998)." He
believed a similar chart had been used in the past by the
committee to reflect the cyclical nature of oil price
movements; he stressed that prices had fallen to very low
levels before. The most recent dip was almost exactly four
years prior when the price was below $11 per barrel in
December 1993 and just above $11 per barrel in January
1994.
Dr. Logsdon detailed that the first significant crash was a
response to an OPEC [Organization of the Petroleum
Exporting Countries] agreement which brought production
under control following the crash of 1986; however, OPEC
overproduced when the price got better and there was
another crash in 1989. He noted that a number of people
from Alaska and other states went to Vienna in 1989 to
attend an OPEC meeting. The next significant crash was in
the 1990s; some argued that overproduction by Kuwait
precipitated the Persian Gulf War. He continued that the
most recent slide in oil prices had occurred about four
years prior for several reasons, including the economic
recovery in the U.S. in 1992 and non-OPEC production.
Dr. Logsdon noted that prices were high in 1995 through
1997 and that the fairly long period of high prices had led
many to talk of a fundamental shift upward. The forecast
prepared the previous fall projected prices coming down,
but things had deteriorated faster than anticipated.
Dr. Logsdon pointed to a trend line in the middle of the
third chart ("ANS West Spot Price") showing that since May
1987, the price of oil had tended to trend upward at a very
modest rate. So far, the long-term average from May of 1987
through December of 1997 was $17.35 per barrel. He noted
that the interval was chosen because of data available and
because he wanted to stick with the ANS West Coast Spot
Price, which did not start reporting reliably until about
May 1987.
Dr. Logsdon questioned why the state had been caught by
surprise. He stated that the fundamental, bottom line was
that supply had succeeded demand in the past year, based on
IEA [International Energy Authority] numbers comparing
supply and demand for the fourth quarter of 1996 and the
fourth quarter of 1997; about 700,000 barrels per day came
into the market in excess of what was consumed. He referred
to the third chart illustrating the beginning of the slide
in oil prices in January 1997, which coincided with the
initiation of oil exports from Iraq ("food for oil
exports"). At the same time, OPEC production had grown by
1.8 million barrels per day in 1997, which was ratified by
the cartel in late November when they raised their quota
from 25 million to 27.5 million barrels per day.
Dr. Logsdon noted that there was an additional factor
affecting the supply and demand that the department was not
able to analyze at the time of the forecast: the impact of
the financial crisis in Asia on the real economy, which was
still unfolding. He did not know the outcome, but asserted
that a great deal of uncertainty had been introduced into
the oil markets. He believed there would be significant
additional downward pressure on the market. There was also
concern related to additional production coming out of OPEC
that had led to prices in the $14 per barrel range once
again.
Dr. Logsdon moved to the next table, which depicted the
situation the state was facing. He reminded the committee
that the forecast was not supported by current market
information. Every month, the department put a newsletter
called "Revenues" on its home page, which assessed the
market based strictly on projections by the NYMEX [New York
Mercantile Exchange]/WTI contract. Quality adjustments were
made, and the department came up with a market forecast. He
noted that the forecast was not based on a qualitative and
quantitative evaluation of trends and key supply/demand
perimeters, which was done when an official forecast was
made; it presented a way to keep track of how well the
official forecast matched up with what the market said was
happening. The $16.64 market number was based on the
previous Friday's futures prices and a revenue projection
of $1.95 billion in 1998 and $1.84 billion unrestricted
general funds forecast for FY 99; the prices were roughly
around $16.50 per barrel. The state was about $131 million
below the fall forecast and about $161 million below FY 99.
Dr. Logsdon maintained that the paper markets could not
tell too much about FY 2000 and beyond. The paper markets
were not liquid once out a couple of months; most of the
buying and setting activity occurred in a short horizon. He
reported market prices in the $16.50 per barrel range
through 1999, but in the fall forecast, they thought the
price would grow up to $19.50 per barrel.
Dr. Logsdon turned to the next chart, "Unrestricted General
Fund Revenues for Different Oil Price Scenarios," showing
the fall forecast compared with calculations for $17.35 per
barrel and a low case of $15 per barrel. He explained that
the purpose of the chart was to illustrate the potential
range of oil prices over the next five years. He believed
the state could maintain revenues something in excess of
$1.9 billion per year for the next five years; at the $15
per barrel price, revenues could be as low as $1.5 billion
by 2003.
Dr. Logsdon thought the question was whether something had
changed to verify that there was a new trading range. He
provided two bar charts comparing DOR forecasts with other
forecasters for the years 2000 and 2005. He pointed out
that the charts were displayed in 1997 dollars (adjusting
for inflation). The 2000 chart ranged from a lower-end
forecast by Petroleum Information Research Associates (a
consulting firm out of New York providing oil analysis and
price forecasting mostly for the industry) at $15.00 per
barrel, to a higher-end forecast by the U.S. Department of
Energy at close to $19.00 per barrel. He emphasized that
DOR was in the bottom group. The 2005 chart showed similar
results, with the bottom at $15.00 per barrel (by the
Petroleum Information Research Associates) and the top at
around $27.00 per barrel (by the International Energy
Administration); DOR's forecast was at around $17.00 per
barrel.
Dr. Logsdon concluded with remarks about the oil price
market. He noted the price had been $14.00 per barrel
before, and it was likely that the price would be $14.00
per barrel again in the future. Over time, the only thing
that could be known with certainty was that oil prices were
volatile. Statistically, the average had been about $17.35
per barrel since 1987; prices were below $14.00 per barrel
roughly 10 percent of the time. He believed the long-term
price should not be changed. He anticipated that DOR would
be making fundamental assessments of trends in the market
when the spring update was done in March. He was confident
that the approach was good.
Senator Sharp queried the average price increase related to
the third page of the handout ("ANS West Spot Price")
[testimony garbled]. Dr. Logsdon replied that the average
would be dropped to about $16.50 per barrel if the spike
were removed; however, the trend would still be upward
because of good prices in the past 18 to 20 months.
Senator Adams asked whether OPEC would be setting a
different world daily-prediction quota, which included the
production rate of Iraq and other non-OPEC nations so that
OPEC could stabilize or control the price of oil. Dr.
Logsdon responded that OPEC's price-monitoring committee
had a monthly meeting and that a meeting would be coming up
the following month. He noted that Saudi Arabia was not
involved, but OPEC was designed to address the described
issues. He added that OPEC's track record had not been
excellent; however, when prices were very low ($10.00 to
$12.00 per barrel), OPEC had been able to control
production to a certain extent and the prices started to
move back up. He noted that DOR would be watching the
situation closely. His understanding was that the position
of key countries with large reserves (Saudi Arabia's
official position in the late November meeting) was that
the economy would grow enough to absorb increased
production coming out of OPEC; they also believe that non-
OPEC production increases would fall short of target. He
thought a change could occur in the position if the market
continued to erode, but in the short term, he did not think
OPEC would do something that would support oil prices and
move them back up again.
Senator Adams pointed to a chart that did not include
Alaska production. He wanted a chart showing the daily and
yearly production rate of Alaska oil in the next five years
related to future oil prices. Dr. Logsdon replied that he
could provide the information.
Senator Phillips asked whether there could be consideration
of an amount representing the 10-year, 15-year, and 20-year
average price of oil, with anything above the amount going
into the CBR and anything below taken out of the CBR. He
opined that the price per barrel should be chosen at $16.50
or $17.00 for the year-to-year budget, and the CBR should
be used as a balancing fund for price fluctuation. Dr.
Logsdon responded that the idea had been discussed; in
essence, the state was doing that, except that the policy
spiked when oil was roughly $21 per barrel. Money had been
put into the CBR fund. However, many other changes would
have to be made in the financial planning process to build
arrangements around $16.00 or $17.00 per barrel prices.
Senator Phillips wanted to act rather than react. He
thought his proposal would help build confidence that there
was a stable year-to-year process. Dr. Logsdon responded
that steps had been taken in the described direction by
establishing the CBR fund and then taking actions to ensure
that it had a balance of $3.1 to $3.2 billion.
Co-chair Pearce queried which percentage of world-wide oil
production came from OPEC between 1987 and 1997. She
wondered whether OPEC's share was going up or down. Dr.
Logsdon replied that OPEC's share had gone down but had
been increasing over the past five years. He noted that
OPEC's market share peaked in the late 1970s, when they
were moving 30 million barrels per day and had about half
the world's production. Currently, OPEC was producing about
27 million of the world's consumption of 70 million barrels
per day and the market share was lower than in 1979. He
added that market-share issues were very important to OPEC,
and was one of the key target variables that were
considered in terms of allocating quotas. He referred to
speculation related to Saudi Arabia and Venezuela.
ANN-LOUISE HITTLE, DIRECTOR, WORLD OIL TEAM, CAMBRIDGE
ENERGY RESEARCH ASSOCIATES (via teleconference), offered a
presentation on the organization's price outlook for ANS.
She referred to a committee handout, "The 1995-99 Oil Price
Environment: ANS." She explained that the overall view on
prices had always been that prices would be lower in 1998
from 1997; the extent of the downward price move had been
accentuated by recent developments, many of which were
discussed in the previous presentation. According to
Cambridge Energy calculations, ANS averaged $19.00 per
barrel in 1997; given the range of uncertainties in the
market (including the outcome of the Asian currency
crisis), the numbers anticipated in 1998 were in the range
of $16.00 per barrel on the high side on an annual average
basis to $13.50 per barrel on the low side.
Ms. Hittle explained that during 1997, Cambridge Energy
used a down-side price risk well below their standard
outlook, called the "modified good sweating" because of the
possibility that Saudi Arabia in particular had a market-
share decline related to Venezuela and others in OPEC such
as Algeria, Qatar, and Nigeria, which increased their
market share; in an attempt to stake out market share for
themselves before sanctions were lifted against Iraq,
Cambridge Energy felt that the threat or possibility of
going into modified good sweating mode existed during 1997.
She detailed that modified good sweating was a term they
had borrowed from John D. Rockefeller which referred to
"sweating out" the competition of other producers by
increasing one's own production and therefore dramatically
lowering prices and forcing other producers to cut
production.
Ms. Hittle continued that there had been a move in the
direction of modified good sweating at the November 1997
OPEC meeting and the current lower-price range. At the
meeting, the Saudis pressed for a quota increase from 8
million to 8.76 million barrels per day and an overall lift
in the quota to 7.5 [million barrels per day]. She thought
they had a very bullish view on world economic growth and
Asian demand. At the time, the approach was not that
unwarranted; a lot of the worsening of the currency crisis
had occurred since that OPEC meeting. In particular, the
unraveling of the situation in Korea occurred very much
towards the end of the year, well after the OPEC meeting.
The timing issue was of significance because if OPEC was to
try and do something in the current year to address the
situation, they could argue that while they agreed to the
new quota, there was room to move back to the lower
previous quota for a temporary period of time on the
judgment that they misgauged demand growth. Therefore, the
timing on applying the higher quota was off, and for a
given amount of time, they might want to move to the lower
quota.
Ms. Hittle stressed that it was not likely that OPEC would
maneuver coherently and at the right time. She thought it
would be difficult to pull off, but was one way OPEC could
handle the situation with lower prices, given enough price
pressure, and given the fact that the Saudis were very
determined not to move back into a swing-producer role by
themselves.
Ms. Hittle added that there were four factors spelled out
in the fourth quarter that could unravel prices:
· Worsening of the Asian currency crisis;
· Mild winter weather in key heating regions in the
U.S., Europe, and Asia (because of high inventories
building);
· Weakening of economies in the U.S. and Europe; and
· Increase in the amount of oil that Iraq was allowed to
export.
Ms. Hittle reported that three of the factors were in
development (the first two and the last). Iraq's limited
oil exports were expected to be increased by 50 percent
towards the end of the quarter, adding another 400,000
barrels per day of Iraqi crude oil into the market beyond
the 1997 rate. The Asian currency crisis had had a direct
affect on oil-demand growth outlooks; in the middle of
1997, Cambridge Energy was expecting total world oil-demand
growth in 1998 to be about 1.9 million barrels per day, but
the growth rate was lowered to 1.5 million barrels per day.
Cambridge Energy was in the process of reconsidering each
country in the region of Asia, with a very likely outcome
of adjusting the 1998 growth rate downward and possibly
having an effect on the total world oil demand of up to
100,000 to 200,000 barrels per day. The trend was likely to
continue into 1999, until there was recovery in the Asian
currency situation.
Ms. Hittle turned attention to how the ANS oil price
(annual average basis) could fall along the $16.00 to
$13.50 per barrel range. She listed developments that could
occur to push to the high side of the range:
· Iraq deciding again to hold limited oil exports for a
significant period of time. Iraq's overall strategic
imperative was to get sanctions lifted.
· Non-OPEC production could come in lower than expected.
The current outlook was for non-OPEC production to
increase 1.2 million barrels per day over 1997 in
1998. There had been delays and problems.
· Quicker recovery than expected from the Asian currency
crisis.
· Stronger U.S. growth and oil-demand growth than
expected; Cambridge Energy assumed U.S. economic gross
domestic product (GDP) growth for the year of 2 to 2.5
percent.
Ms. Hittle turned attention to the middle of the range, or
the modified good sweating, where the current situation
was; the annual average on an ANS basis was around $14.70
per barrel for 1998, assuming the fundamentals, including:
· Non-OPEC increase of 1.2 million barrels per day;
· An increase in OPEC production of about 1.5 millions
per day;
· Increase in OPEC NGOs of about 100,000 barrels per
day; and
· A total of 2.8 million barrels per day, against the
demand-growth assumption of 1.5 million barrels
mentioned earlier.
Ms. Hittle continued that the numbers would arrive at an
annual average of around $14.00 per barrel for the ANS.
Ms. Hittle turned to the downside risk and the "lower
band." She believed the situation would be very much driven
by the Asian currency crisis, if it worsened and spread to
having a significant effect on China's economic situation
and oil demand. She noted that there had been little
adjustment for Chinese oil-demand outlook for 1998 since
the crisis occurred; most of the adjustment had been made
on the non-OECD [Organization for Economic Co-operation and
Development] nations. The situation could move towards the
downside of the range (roughly $13.50 per barrel) if the
crisis significantly affected China's oil demand and
economy and started to affect the U.S. and European
economies.
Ms. Hittle directed attention to the year 1999. Cambridge
Energy anticipated prices moving up a bit as the market
came more in balance. She stated that the fundamentals for
1999 (based on the modified good sweating outlook, a fairly
optimistic recovery rate on the Asian currency rate in
1999) anticipated that world oil demand would increase to
around 1.6 to 1.7 million barrels per day (a "moving
target" given the uncertainty of the crisis). On the supply
side, the expectation for 1999 was:
· Non-OPEC increase of about 1.3 million barrels;
· OPEC crude increasing at a slower rate of about
700,000 barrels per day;
· OPEC NGOs increasing at 100,000 barrels per day; and
· A total increase of 2.1 million barrels per day.
Ms. Hittle reiterated that Cambridge Energy anticipated a
bit of a recovery in prices for 1999. She indicated the
chart, showing some weakness in the third quarter because
of the potential for oversupply; on an average annual
basis, the average rate would be around $15.40 per barrel
in the modified good sweating scenario.
Ms. Hittle reported that the upside range could be $16.70
per barrel; the downside numbers could occur if the
currency crisis worsened.
[SFC-98, Tape 2, Side B]
Ms. Hittle spoke to the longer-term forecast. She relayed
that one year prior, Cambridge Energy would have predicted
that prices in 1998 and 1999 would be weaker than they
previously had been. The "disruption" had delayed the
expected tightening in the market from around 2000 and 2001
to 2002. For example, in 2000, prices for ANS might average
a move up towards $16.00 per barrel (assuming a robust
recovery in the Asian currency crisis) and start to move up
after the year 2000. The long-term outlook was towards the
flat nominal under world economic growth of 2 to 2.5
percent occurring in the 2001 and 2002 period. A stronger
world economic growth of 3 to 3.5 percent would move
higher. She reminded the committee that the numbers were
averages and to keep in mind that there was ample room for
volatility, but over the longer run, the tendency would be
in the described direction, with weakness in the interim as
the Asian currency crisis was weathered. She added that the
recovery in price would be pushed further into the future
if the currency crisis worsened significantly.
SENATOR JERRY WARD asked for details about the Asian
currency crisis and how it had been factored into the
projections. Ms. Hittle warned against overplaying the
effect; what had occurred in the current market had
happened on both the demand and the supply sides. She
emphasized that the effect of OPEC deciding to go for a
higher quota should not be minimized; it brought a lot more
oil into the market. The importance of the Asian currency
crisis was that before 1998, there had been strong demand
growth in Asia and Latin America (and North America in
1997) that kept supply and demand more or less in balance.
The imbalance was created by the loss of the demand growth
as well as the increase of OPEC production. In addition,
the continuing increase of Venezuela's capacity (300,000
barrels per day in 1998) and its determination to produce
regardless of any quotas was important.
Ms. Hittle addressed the Asian currency crisis. She
reported that Cambridge Energy was going country by country
and product by product looking at the balance between gas
and oil and trying to figure out the effect of the crisis.
For example, the sharp devaluation of the currency had hurt
demand; people were losing jobs and commuting less, and
refineries were producing but not selling. There was still
demand growth overall year-on-year, but the weakening of
the economy was having an effect in Asia. She still
expected growth in North America; Europe was on its own
because of strong gas competition there. Cambridge Energy
had tried to deal with the situation by looking at the
downside risk.
Senator Sharp queried the process of measuring the effect
of the currency crisis on the economies of various Asian
countries, especially the actual reductions from projected
consumption. Ms. Hittle replied that the effect varied
country to country. Cambridge Energy was trying to get
numbers that were as current as possible. She offered to
get more information about exact time lag for key
countries. She thought there would be readings by April for
the first quarter.
Senator Sharp asked when the OPEC meeting was scheduled.
Ms. Hittle replied that the monitoring committee meeting
would be the following week.
SENATOR RICK HALFORD queried indications of upward or
downward movement, such as how various countries were
affected one way or the other, so that the legislature
would have "signposts" to work with. Ms. Hittle replied
that the next country Cambridge Energy was worried about
was Malaysia. The next key country to watch was China.
Taiwan so far had been insulated as its economy was
oriented towards service, but she felt it needed to be
watched as well. On the political side of the equation, she
suggested watching what happened to Indonesia in terms of
stability. She mentioned elections in Thailand and Korea in
terms of the ability of the governments to deal with the
issue. Overall, the situation in Thailand was somewhat
stable, and they hoped that would continue. She added that
another signpost would be relations between Iraq and the
U.S.; for example, if the U.S. took military action against
Iraq during the quarter (although the U.S. wanted the
limited exports to continue moving, even if military action
was taken). She noted that the decision whether to increase
Iraq's volumes would be made in March; another window of
opportunity would occur in June or early July. For Asia
overall, she believed the concern was about political
stability.
Senator Halford asked for examples of countries on the
upside as well. Ms. Hittle responded that uncertainty
resulting from Iraq's decisions not to hold to the limited
oil sales plan was a factor. From an export point of view,
if Iraq did the same thing again, about 1 million barrels
per day would be taken out of the market, which would have
an effect on the supply side of the equation. Secondly,
there were non-OPEC problems. For example, there could be
possible delays in Columbia. Cambridge Energy's outlook for
Columbia to increase production the previous year was based
on the start-up of the new pipeline, which was in progress.
However, the terrorism situation could have an effect on
exports, and that would help lower non-OPEC production.
Finally, she pointed to larger-than-expected oil demand in
North America as something to watch. Cambridge Energy's
outlook assumed oil-demand growth in 1998 of between
200,000 and 250,000 barrels per day. Stronger-than-expected
oil-demand growth and economic growth in the U.S. would
help offset the Asian currency crisis. In addition, OPEC
might ultimately try and come up with an interim solution
related to lower quotas.
Senator Halford queried the differentials between ANS, West
Texas Intermediate, and Saudi Arabia oil prices. He
wondered whether there was a pattern. Ms. Hittle answered
that Cambridge Energy had a quarter-by-quarter historical
database of the differential. She noted that the prices on
the earlier-discussed chart were based on an annual average
of the differentials, looking forward. The differential
used was $1.60 for 1998 and 1999; it was used on the
assumption there was nothing drastically altered on an
annual basis. She agreed that there were lows of volatility
in the interim. Cambridge Energy did not see reason to
adjust annually. The Asian currency crisis, for example,
was considered; their analysis was that overall there would
be a crude shortage, which would not significantly weaken
ANS [prices].
Co-chair Pearce reviewed future plans for meetings.
ADJOURNMENT
Co-chair Pearce adjourned the meeting.
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