Strictly: Drilling and oil-field services Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Crimson Ghost who wrote (40430)	3/19/1999 8:58:00 PM
From: Greg Jung	Read Replies (2) of 95453

Open question: someone please explain why Oil service industry should be responsive to a supply-constrained oil price increase. It seems to me, there is to be less production and lower exploration. Unless day rates are tied to the oil price, I don't see why economics of the service portion should change; there are still the same people competing to service a smaller supply. Only when demand increases and rigs are more heavily subscribed does it make sense that oil service stocks should make money again. So those stocks with oil to sell should continue improvement while services should stall out, awaiting recovery of the asian economies (which may be forstalled by higher oil prices). I am presuming I am wrong and that day rates already are rising, otherwise the stock price rises in SLB, HAL, etc. are crazy. I would like to know why the rates are so responsive; my guess would be that they should lag, and improve only after substantial economic strength. Greg

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next