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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: ItsAllCyclical who wrote (57639)12/30/1999 4:43:00 PM
From: Razorbak  Read Replies (1) of 95453
 
Y2K and Oil - Psychology & Fundamentals

JimL: I agree that the media will probably hype the market impact of supply disruptions more than the demand disruptions. Hence my own portfolio is heavily weighted towards long positions in the oil & gas market. I just sold my last tech stock today (PROG) - also my largest position - after a 43% run-up this morning, so my portfolio is now over 80% E&P and OSX stocks. Nevertheless, I am wary of the eventual trickle-down effect from demand disruptions. While the general public may not pay as much attention to demand effects, industry analysts and crude traders will, and the API/DOE numbers will be watched closely.

Remember how many times refineries went down due to fires or maintenance earlier in the year, and that ended up having an impact on crude draws reported in the following weeks? Well, I expect the same thing to happen following any Y2K demand disruptions, too.

The key question in my mind will be whether the impact of supply disruptions (fundamentals + hype-induced psychology) will outweigh the inevitable impact of demand disruptions (mostly fundamentals). I'm betting the former will outweigh the latter, and have placed my investments accordingly, but you can damn well be assured that I'm going to be on the lookout for demand disruptions and API/DOE impacts over the next two weeks like every analyst and crude trader in the market.

Once an analyst, always an analyst, I guess. ;-)

Happy B2K! <g>

Razor
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