David G., Some notes from a talk that I attended last friday...
"On my Friday off last week, I attended IPAM's monthly luncheon.
The guest speaker was Tom Petrie (Petrie, Parkman & Co.) a market analyst who specialized in O&G, and who has been interviewed on several major new shows. Fascinating speaker......very knowledgable (sp?).
Here are my notes from Mr. Petrie's discussion of the O&G industry.
Overall, he expects:
more negative economics for the oil companies in '99 (no big surprise),
oil prices have hit bottom and will be up to $16 (WTI) by June (I think that's when he said....this was kind of controversial....and looking at his slides comparing several periods of downturn, I'd bet that it'll take about 6 months longer than he talked about for rebound.....but he's the expert)
gas prices have a grim outlook for '99, $1.30-$1.40 by May/June, but much better for 2000/2001
In general, he sees some of the issues in '99 to be:
Turmoil in the mid east represented in changes in OPEC strategies at March meeting (hopefully). If the changes are delayed to the fall meeting, they'll be more dramatic and traumatic. The turmoil is due to
Hussein's death in Jordan
Saudi Arabia's change in heir
Saudi & Iran's power struggle over allocation of production
Venequela/Saudi discussions
Asian contagion risk is still high
Russian implosion ---> reduced production capabilities
Venezuela's President Chavez looks like positive factor for oil industry
Maybe one more mega merger, Texaco/Arco.....doesn't see Chevron merging with anyone (this prediction excludes state oil companies in Europe, where he expects consolidation within the EU so they can compete with Shell, BP/Amoco, Exxon/Mobil)
Consolidation continues for smaller companies (e.g., Amerada Hess & smaller)
Reshaping of service companies" |
