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: ItsAllCyclical who wrote (67407)	5/31/2000 7:24:00 PM
From: BigBull	Read Replies (1) of 95453

Perhaps. Still the world crude markets will be finding out in a hurry just how much spare capacity OPEC has, won't it? If the stories are to be believed from the press, Iraq, is currently pumping at full capacity, with really nothing left to go. Only the Saudis seem to have the spare capacity. Maybe 1 mbpd? Is that enough? Will that be enough to build stocks or just be enough to slow the decline. Time will tell. Sure crude could fall on spin doctoring, jawboning, and a modest increase in production. It did today. I do question how long that drop will last. Remember the OPEC price band agreement was for 500 thousand barrel a day increase. Very modest considering stock levels, both worldwide and in the US. Imo traders are taking advantage of a very short term situation. Reality will begin to sink in soon. If OPEC starts pumping more crude in a week then how soon to market? An additional 3 weeks? I don't think $22 dollar oil is right around the bend. 27 maybe. Then what? More API's coming out for the next 4 weeks. Having said the above, the OSX loves to do a two day rally followed by a three day selloff that makes a nice double bottom, before the big run. IMO that could very well happen again. If the OSX does not do any lockstep sharp sell off with crude then probably a powerful rally is in the offing. Still I think laggards are the way to go as later cycle earnings are starting to become more visible to investors, while many off these stocks have discounted very little of it. BTW lots of nice buy signals generated in laggards today. I still have a nice chunk of cash to put back to work, so I sleep fairly easy. Bull

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