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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Roebear who wrote (49873)	8/25/1999 8:13:00 PM
From: JoeDi1213	Read Replies (3) \| Respond to of 95453

Roebear - The sale of 30 million bbls of oil by the Germans is equal to less than 1/2 days worldwide consumption. Worldwide consumption is about 75-76 million bbl a day of oil and gas. Here in the US I believe we are about 19 million plus for oil and gas. Today whack on the NYMEX was strictly technical in nature. I had this in the back of my mind for a couple of days that the switch from sept to oct crude was not a good roll for the longs with the last several days prior to expiration the market trading around 20 cents contango. (Full carry 35 cents depending on storage.) In a good strong market we should be trading in a back. We were in a back in the middle of the month but as it got closer to expiration we drifted of into contango so basically it was a setup. Longs buying Oct above 22 selling sept for 21.75 and it doesn't take much for them to be choking on their longs. The hedge funds are mostly computer driven so they all pile in and out together and today was the pile out day. Just a small battle in a larger war. You have to remember that 90% of the floor traders and locals have no idea of what a bbl of oil looks likes nor the tremendous capital outlay that it takes to find it and get it out of the ground. They are trading pieces of paper. One other note for those into the Nat Gas scene. It would be helpful if you companies you are interested have a majority of the operations in the east because that is where the tightness is. The west is a little ahead of last years storage