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Strategies & Market Trends : John Pitera's Market Laboratory
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To: John Pitera who wrote (2808)9/13/2000 9:23:02 AM
From: Logain Ablar  Read Replies (1) of 33421
 
Hi John:

Thanks for the post. One point on Cramers commentary. The oil and oil service stocks did not do well in 90 because crude oil started dropping during the air campaign and especially once it was realized the Kuwait well's were being capped in record time. Crude did not stay high for a prolonged period of time.

I still think we should look to the 73 - 75 period (and really up to 82 for the peak) period for the way oil and oil service stocks reacted to high crude.

I expect a release out of the strategic oil reserve in the near future to help lower the price but these is still a short term measure. It should provide a dip in stock prices but will be an opportunity to buy before the next leg up.

From what I read (which means this is already priced in the market) demand is still high (i.e. the higher prices have not made a significant dent (yet?? @ some time it should but since the Gulf war we've had ample supply without restraints and it takes a while for this increase to have an impact, i.e. people have not appreciably changed thier gas consumption habits) and supply is still tight.

One item I was able to confirm is Lloyds did tighten thier insuring standards on oil tankers (the spills were too costly). This impacts delivery times.

I agree completely with Cramers assessment on caution. 10% of the population can absorb the gas increase but 90% will feel it severely.

Just some thoughts.

Tim
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