for those selling TMAR: (a) you must believe that oil production in the gulf will decrease by at least 30% over the next two years (b) that world wide demand for oil will remain stagnent over the next two years, (c) that deep water rigs will decrease in number over the next two years, (d) that Asia will stay depressed for the next two years, (e) that North America, Europe, Africa and South America will not need as much oil as they used to over the next two years.
(a) oil production in the gulf may decrease by 10% at worst, nothing more. new finds in the gulf portend, however, that production is increasing not decreasing.
(b) demand for oil has been increasing since the 1950s every year and 70% of the world's population still remains "unmechanized"
(c) deep water rigs having been increasing in number for the past two years with no let up in site due to the dynamics of oil discovery (old sites are running out of oil, i.e., Texas, AK, while replacements need to come on line
(d)Asia is not Japan Inc., look at China; still the fastest growing economy on earth and in desparate need for oil
(e) if the world outside Asia shows a decreased dependence on oil over the next two years, some of us will be riding again with horse and buggies.
this situation reminds of the Utility sector slowdown in 1995 which has since gone up nearly 100% |
