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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: pbd007 who wrote (28799)1/6/2004 8:00:18 PM
From: quehubo   of 206266
 
I saw the release and noticed the big selloff. US land rig RIG counts did not changed much in Q3 & 4. At this point in the cycle the question is not so much what happened in Q4 2003, but what will happen in Q1-2 2004.

This time last year the argument was that there would be a limited drilling response because the E&P's were prospect short. Soon after the land rig count rose faster than most everyone expected. With drilling leveled off now for 6 months at this high level you could believe the E&P's were running as fast as they could, or that they were being much wiser with their expenditures or that they saw the rapid rise in storage much to everyone's surprise and decided they had better not work any harder because a supply glut was likely around the corner.

My belief is that the rapid rise in storage with its bearish demand implications was the driving restraint and then followed by fiscal control.

We have seen that supply is not increasing and that demand is very high and that prices are higher than many expected under present circumstances.

I dont believe demand limited day rates so far, E&P's would have paid much more for the RIGs they put to work in Q4 if they had too. There is more supply this cycle than last and that has driven the day rate inflection point higher.

I wont be selling much of anything unless the weather forecasts flip 180 bearish.
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