-----Original Message-----
From:  Seigle, Clayton  
Sent: 31 May 2001 09:57
To: Shankman, Jeffrey A.; Nowlan Jr., John L.; Schroeder Jr., Don; White, 
Bill; Wilson, John L.; Danaher, Patrick; Fuller, Robert; Goughary, Jim; 
Mulholland, Sarah; Mahoney, Chris; Thomas, John Buckner; Koller, Ross; 
Hickerson, Gary; Bradley, Michael W.; Scott, Eric; Maffett, Randal; Spencer, 
John; Slovenski, Richard; De La Ossa, Mario; Berkeland, Bill; Jackson, Lee
Cc: Tholan, Scott; Johnston, Robert
Subject: Iraq Update
Sensitivity: Private

As expected, it looks like the US and UK have accepted the fact that the 
sanctions cannot be restructured before the June 3 deadline.  We still expect 
the UN to extend the oil-for-food program for six months, meaning little to 
no Iraqi disruptions in June.

However:  sources close to the UN report that Washington and London are still 
pushing hard for a shorter extension (1-2 months) of the program.  If they 
get their way on this issue, expect the Iraqis to say some bullish things in 
response (like they will not participate in the next phase of the 
oil-for-food program).  This might not be immediately bullish for WTI, but 
would set the stage for support as the market anticipates the end of the 
short extension a month or two down the road.