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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: ItsAllCyclical who wrote (77633)10/31/2000 1:47:48 PM
From: que seria  Read Replies (1) of 95453
 
JimL: In addition to your well-informed points, there would seem to be little logic in making an E&P buy or hold decision based upon whether pipe suppliers are busy. What does statis or decline in the pipe business mean to me (admittedly an outsider, ignorant of the oil business beyond "thread wisdom")? Only that those who buy (or perhaps make) pipe think there will be less (or no higher level of) drilling and completion and pipelaying going on.

That's sure not bad for my E&Ps! By all means, let the NSSs and the MAVKs of the world slow down, and let's see what happens to oil and gas prices! The suppliers' needs and goals don't coincide with those of consumers, so I see no reason to suppose that a slow-down or flattening of pipe orders is a signal that product prices are going down. Exactly as Slider and others have said, the service companies and their E&P customers want security about prices/orders, and some balance sheet repair.

I can see how producers and pipe suppliers adding to pipe orders and/or inventory could be a meaningful indicator of additional forthcoming product supply, but their declining to do so means less to me. Of course I'd pay more attention to pipe purchases if I bought service stocks, but I don't.
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