President Bill Clinton's decision to release 30 million barrels from reserves doesn't bode well for everyone, especially Amerada Hess (AHC) - Get A.H. Belo Corporation Class A Report.

Bear Stearns'

oil analyst Fred Leuffer cut his rating on the stock to neutral from buy based on the decision, saying the move strengthened the firm's conviction that oil prices are headed for a steep decline. The note said the release will result in a quick build-up of petroleum inventories, which, "in conjunction with a sharp increase in oil supplies from


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in recent months, should be the catalyst for a steep drop in oil prices, in our judgment. We continue to believe that a price for West Texas Intermediate crude of $20 per barrel in 2001 is a reasonable expectation."

Hess shares were recently down $2.00, or 3.1%, to $63.63.

Bear Stearns said Amerada Hess' stock price is likely to be under pressure during the period in which oil prices are falling. The firm said the stock has not reached its price target of $75 per share, but it has been a good performer and has advanced 37% in the past seven months.

"Given the company's sensitivity to changes in oil prices and the stock's recent performance, we believe the stock price could correct by some 15%-20% from the current level," according to the note.

Still, the firm said that the company's oil and gas production growth, estimated at 10% in 2000, and 5% in 2001, exceeds that of most major oil companies and that it will continue to believe the long-term outlook for Amerada Hess is good.