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: Think4Yourself who wrote (74626)	9/26/2000 10:33:02 AM
From: Tomas	Read Replies (1) of 95453

Forgotten bonanza in oil stocks - The Globe & Mail, September 26 VOX Compiled by Fabrice Taylor Investors heard the wrong cue yesterday when they shed their oil holdings as crude prices dipped. On the surface, it makes sense to lower expectations for oil companies given the drop. But turn a few stones, and you find bargains. The oil slump helps the shares of producers in two ways. The first is by taking pressure off governments and OPEC to do anything drastic to ease prices. This removes a lot of uncertainty over the commodity, and as we know, uncertainty is a stock's worst enemy. The second is that oil, although falling, is approaching a more sustainable price level. Let's assume that oil prices average $29 (U.S.) a barrel in fiscal 2000. Let's then assume -- conservatively -- that oil averages a relatively stable $25 (U.S.) in 2001. Now consider that the commodity price currently built into oil shares is between about $18 and $22. The potential appreciation is fairly evident, especially for companies that are heavier into oil as opposed to gas, and whose shares are selling off sharply.

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