Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Denice who wrote (34625)	1/10/1999 11:28:00 AM
From: articwarrior	Read Replies (2) of 95453

Denice "Will we go lower with the rest of them? Or do investors head for gold and oils during these times?" Oil is a commodity that is dependant on supply/demand. The forecasts now currently reflect a rebound in the second half of this year. Anticipating this strong demand will drive the price of oil up fairly quickly. When a correction in the general market occurs and interest rates are so low, money managers look for the best money making sector to weather the downturn. Oil meets the criteria by being so depressed in price, lowest P/E's in the market today and best book values around. Gold on the other hand goes up when inflation rears up, Currency fears, war etc... Gold's ability to rise in these events has been subdued in the last twenty years. IMHO Asia, though struck by a financial earthquake, did not loose infrastructure. The wonderful industry is still there and recovery will occur at a breakneck pace within the next couple of months. Look to recovery in the semi-conductor markets, steel industry, and technology sector followed by others. My forecast for the oilpatch for 99: The severe whiplash in the price of oil has caused major shutdowns of wells and rigs. This whiplash will drive the cost of oil up beyond the 25 dollar per barrel by the end of 1999. The supply demand curve will shift dramatically. Many of our folks like Big Dog, Slider might laugh but according to Big Dogs rig count decrease and worldwide rig decreases this whiplash/surge in oil is a "NO BRAINER" Accumulate oil over the next year on dips and reap rewards by this time next year. Benefits include holding the patch for one year and selling with a tax advantage!!! Good Trading Second, the meetings of OPEC is expanding to include the other oil countries. The severe crash of oil has brought about a common cause among the major suppliers. Their common goal is to maintain the best price for oil in the world and stabilize their economies. Although past relationships have been rocky...Greed will rule in the end and opening the spigot is not an answer to substained higher prices.

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