Mark, My assumption about lower fuel prices is all of the uneconomical capped holes that have suddenly begun to be drilled again. I can't really explain it, but as soon as something seems to be going up forever, supply is found. Near term, my little E&P cos are working 25 hours a day. Longer term, they aren't making any more of the stuff. A couple of years ago a fella, I can't remember his name, wrote me a long, well thought out and very persuasive note about why $14 a barrel oil was here to stay and there was no way it would go higher. In fact, it might go lower. I didn't know why that wouldn't be the case. His analysis made more sense than mine. I just figured that when people lost money, they would stop drilling and that Opec would put their chaotic tendencies aside for their common good. Now I think drilling will start again and that there will be a reason why Opec will increase supply.
GDP definitely figures into my analysis. However, I try to figure out what GDP would be without the hedonics and other scams.
I've sold the last of my BR and UCL. I hope to buy them lower again in the future. |
