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Gold/Mining/Energy : Trico Marine Services (TMAR)
TMAR 22.420.0%9:47 AM EST
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To: JZGalt who wrote (772)8/26/1998 4:38:00 PM
From: Gameboy  Read Replies (2) of 1153
 
I'm not smoking any drugs and I think its quite possible.

1) the Asian Crisis (which seems to be at the heart of pessimistic forecasts) according to an August EIA brief:

Prior to the Asian crisis, world oil demand had been expected to increase 1.5-2.0 million barrels per day (bbl/d) in 1998 compared to 1997. The U.S. Energy Information Administration now estimates that world oil demand growth from 1997 to 1998 will be only 1.2 million bbl/d, about 300,000 bbl/d lower than had been forecast before the Asian crisis.

That's the Asian Crisis - 300,000 barrels per day.

2) OPEC made a miscalculation and increased production by around 3 million barrels per day. They obviously have the ability to choke off production - if they don't, OPEC countries could be the next Russia, or Indonesia, or Nigeria. OPEC is getting lot's of help because at the low prices they've caused the oil production infrastructure is crumbling (we're seeing rig counts down and marginal wells are being shut down).

September 1, Saudi Arabia will cut production by another 18% and Kuwait may cut another 80,000 barrels/day. Also, they mentioned unannounced surprise cuts - moves like central banks to shore up currency.

Don't be too surprised to see $18 oil in October.

Best of luck,

Steve
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