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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Nathan who wrote (55082)11/19/1999 5:19:00 PM
From: Gary Burton  Read Replies (3) of 95453
 
Nathan---My 2c fwiw--"everybody" knows that 1)oil is very high due to OPEC's adherance to cuts and 2)sooner or later OPEC will increase production somewhat next year-be it at end March or at end June or at end Sept--which will then lead to 3)a drop in the spike price of oil---so, traders don't want to push the shares higher now until after the prod increase and they can see how severe the inevitable price drop becomes. Even if oil goes to say 35 short term due to Y2K fears or reality and the PCF multiples go to very low levels, traders will still be reluctant to push the shares to new highs because thay will all say to themselves "wait till OPEC raises production" and therefore simply ignore the pcf mutiples (fleeting in the night so to speak, like GM's multiple at the peak of the car cycle). The longer this waiting game goes on the more frustrated holders of the shares will become, as they all want to sell at higher prices in order to pass the risk on to another set of investors.
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