Piffer OT - And Other Assorted Nuts Message Board

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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts

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To: Jorj X Mckie who wrote (52465)	9/16/2000 2:03:26 PM
From: Logain Ablar	Read Replies (5) of 63513

Hi Tom: On oil stocks John should have a better handle than I. We may see a pull back here if oil has peaked (I think its getting close although a hurricane can cause a short term spike). What is different now from 1990 is once the US started bombing Iraq oil peaked and so did the oil stocks. The oil stocks then sold off as the price per barrell dropped. I think were more in the 72/73 time frame where oil jumped and then sustained its level (and actually continued to go up after the 78 shock). The oil companies and oil related service companies did quite well. As the country was in a recession people from the rust belt and New England just moved to Texas. I'm pretty sure the oil stocks peaked in late 1981 or early 82. So it took 9 to 10 years for the demand / supply imbalance to reverse. As long as the world economy doesn't go into a recession I don't see oil going below $25 (actually I'd be surprised if it went below $30 in next 6 months but I also didn't think we'd go above $20 last year FWIW.) Hey we are only 10% away from $40 I think (not sure on this) we have a refinery problem which is creating part of the supply problem. Why I thought the Brits were shooting themselves by hindering delivery although this does grab the gov't attention. We also have a deliver problem in that Lloyds no longer underwrites oil tankers over a certain age (its either 15 or 16 years). This is one reason I'm invested in NAT and the other is its dividend. We also have an exploration / discovery problem. The last recession (@ $10 it was a depression) in the oil patch (just 2 years ago) forced many companies to just eliminate jobs. Now there is a huge demand but the people have left the field for "more secure" employment. The companies are having problems finding people to work on rigs. So from the above I don't think we'll go below $25 soon and can see your $40 but @ $35 many people are having a hard time making ends meet. A couple earnings 60k a year with 2 children is having a hard time right now. Europe has to be much worse. This can be the wild card to throw us in a recession. All of a sudden consumer spending drops and then business spending will follow. I bailed on SNDK early in the week (after you @ a lower price <g> but jumped back in at the close Friday @ $80. Figured the MM's were keeping it down. Same with CMRC re: the MM's @ $70. I actually like the natural gas stocks over oil at the momment. DVN looks like its ready to go to $90. BR is another but maybe it will pb to $36 again. On the money - September 15, is one of the estimated tax payment days. Companies and individuals. While individuals might have held and then sold securities last week to pay corp's. would not have had the funds in equities. I think Sumner (conspiracy theory) will buy back debt next week with surplus funds. The banks will put this money to use. He has been doing it all year so this should continue. If we don't have liquidity the market can become UGLY quite fast. Tim

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