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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Think4Yourself who wrote (63935)4/6/2000 9:07:00 AM
From: Big Dog  Read Replies (4) of 95453
 
KEG is looking strong...needs to bust through this resistance in the 11 area though. And I expect it will do so soon.

Ever hear of 'The Invisible Crisis'? That's what is going on in oil these days. I have been enlightened on my vist to Europe over the last week.

In a nustshell...demand is rising, capacity (both OPEC and non-OPEC is falling), field production is declining (depletion). OPEC, along with non-OPEC producers, have not invested the money to increase capacity. Why should they? So oil can be cheaper?

WIthin the next 1-2 years reality will set in and the price of oil will be determined not by control of the supply, but by capacity to deliver. This will send oil prices much higher at which time OPEC will make deals with western companies to bring the considerable capital needed to increase OPEC capacity. If oil prices get too high then we will see moves to fuel switching...which is not a good thing if you are an oil seller. So to keep prices 'in check' OPEC will make a strong effort to increase capacity by using western capital.

That is what the big oil boys are waiting for...the chance to drill in OPEC land.

If every rig that now exists was used flat out to drill in OPEC land, they would still not be able to increase capacity above increasing demand and depletion levels.

I'll toss out more tidbits on this subject in the coming days.

big
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