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

To: BigBull who wrote (56073)	12/5/1999 10:38:00 AM
From: The Ox	Read Replies (4) \| Respond to of 95453

Bull, One issue that should ALWAYS be in the back of everyone's thoughts is that OPEC can change the landscape in a moment's notice. Don't completely discount or ignore the possibility that they could choose to increase production at ANY TIME. It's tough to place a bet on them raising production now, as their last move caused the market to bottom out. That said, we don't really know what's going on behind the closed door sessions. All we are privy to are the press releases and statements made by individuals. Guess what this sector will look like the day OPEC increases production? It will be a one day blood bath. I subscribe to the Boom 2000 ideal. But I don't kid myself into believing that OPEC will continue to do the "smart thing". There is still risk inherent in the system and therefore there is risk in these equities. We are to a very large degree at the mercy of the crude/NG traders. The day the sentiment shifts will be the day a lot of people will lose a lot of money. I subscribe to the theory that OPEC wants high prices but not too high. They don't want everybody in world drilling for oil. Todate, cap-ex spending hasn't been soaring. The longer oil stays above $25, the closer we get to 'everyone' drilling. While in the short term, a drop in crude prices to the low 20s would knock a lot of wind out of this sector, it won't change the fact that we are still at or near the bottom of the (EDIT: drilling) cycle. JMO, Michael