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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Sunny who wrote (24390)6/19/1998 6:03:00 PM
From: Chuzzlewit  Read Replies (1) of 95453
 
Sorry if I sounded preachy, but the problem that I see with OPEC is that it tries to artificially set prices through production quotas. A country that is in need of hard currency and whose marginal revenues exceeds marginal costs would be expected to continue pumping (secretly perhaps). Right now storage of oil is the major problem, so oil pricing from the well has very little current impact on demand.

So many products owe their origin to oil that I think it is naive to believe that demand is inelastic. That's basically why I think oil prices depend on a revival of decent economic conditions in Asia.

TTFN,
CTC
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