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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: SliderOnTheBlack who wrote (31449)11/4/1998 3:09:00 PM
From: dfloydr  Read Replies (1) of 95453
 
A thought about the rising oil stocks.

Don't forget ... all that oil inventory will make a nice profit for its owners when prices do move up ... say $3.00 over the next six months or year ... a lot more money than they would earn putting that money in the bank.

I am pretty sure that oil is marginable or securable, so $10mm of cash put into oil inventory investment probably controls $20mm or more oil. $10 mm of cash in the bank gets you perhaps 4.5% on $10mm period. In six months that is 2.25%.

I think the average oil man could figure that bet out pretty well. Look for some nice inventory gains over the next year. Why let the well owners make the inventory profit when you can do it yourself?

So the inventory build up may just be the same bet that is moving the stocks up ... but a bet being made by players who can not or do not want to own stocks and maybe have a need for the oil.
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