Sacrificed a little more money to the God of Seven Seas this morning, and offset loss somewhat with profits taken on NE. Drillers look really scary....Back into cash for now.
Personally, the following article posted on the driller board last night didn't leave me with a comfortable feeling on the sector:
WASHINGTON (CBS.MW) -- Falling oil prices have just about dried up
exploration and drilling for petroleum in the United States, the American
Petroleum Institute said Wednesday. The API warned that U.S. oil production will
fall significantly in the coming months and years. (For details on today's energy
markets, see Futures Movers.)
The number of rigs searching for new oil reserves plunged 32 percent from
year-ago levels in June, the API said. The number of new oil and gas wells
completed fell 4 percent in the second quarter to 7,161, with new oil wells falling
21 percent to 2,431. Gas-well completions rose 14 percent to 3,020.
"Lower crude-oil prices have substantially reduced the incentive and, in many
cases, the financial ability to search for new sources of petroleum and to maintain
production in existing marginal fields," said Edward H. Murphy, director of the
API's finance, accounting and statistics department.
Without debating the motives behind API's slant in the article; what matters is the perception of the public towards the sector. API does have a political and economic motive to boost domestic production, however, the facts of lowering E&P budgets of the magnitude mentioned here have not been fully factored into the stock prices, if indeed the recent cuts signal a growing trend towards cheap imported oil... |
