Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Post_Patrol who wrote (64050)	4/7/2000 11:27:00 AM
From: ItsAllCyclical	Read Replies (1) of 95453

>> This sector still trades on the "price of oil" not on future expectations and oil is going down. << Ok, then how come the XOI, XNG and OSX have rallied considerably while oil has come down from $34 to $25? Floor effect, removal of uncertainty. More important than the price of oil is the likelyhood of oil staying above $18 long term. This sideways action in the OSX and XOI is related more to the tech rally. Earnings expectations for OSX will improve considerably from this quarter on out. If OPEC manages to erase the doubt about a price band watch this sector fly. We also have yet to see the majors increase their exploration budgets but they will soon. This will be HUGE when it finally happens. Too many potential drivers out there imho. Yes many OSX are getting pricey, but the XOI and XNG still have 30-50% upside. There are plenty of OSX laggards. This boom will likely last beyond 2001 and eclipse the old highs. That's why the OSX stocks are trading at a premium now.

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