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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: oilbabe who wrote (53766)10/30/1999 10:15:00 AM
From: Gary Burton  Read Replies (1) of 95453
 
Interesting interview in Barrons'this weekend with David Purcell of Simmon's&Co--he expects OPEC to increase production BEFORE March mtg and hopes that they do so formally,in one fell swoop, rather than trickle down cheat on quota's. His 12mth target on crude is $20 according to a table in the report..."once that occurs,you will have a down trading period and crude prices will drop maybe $1-$3.I think after that, once people realize the underlying fundamentals are still pretty good. that's when you put a floor on prices..." etc. He likes the drillers and service cos (presumably because day rates and drilling will still pick up near or slightly below $20)---His scenario is in keeping with what the charts are 'saying'--it is best that we see that last blip down on crude below the bottom of the recent first spike down (20.50ish) in order to put that second leg on the stool. Stock prices are of course starting to discount that now and so once we see maybe sub-20 for a very temporary time, the shares should then likely establish a firmer bottom, from which to better launch their next up-phase...The charts on XNG and XOI are giving off a similar message- likely another blip down, as perhaps the C leg of the Correction.... If of course, OSX firms from here and exceeds 75.75 early next week, the 65ish low on this index will likely hold.If, however it dips below 70.98 first, then the downtrend towards 65 or a bit below is still on trend. We shall soon see which will it will play out.
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