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

To: Fun-da-Mental#1 who wrote (60131)	2/11/2000 4:47:00 AM
From: The Ox	Respond to of 95453

Picked up this link on the MDA thread, hope it's not a duplicate post on the thread: itulip.com Oil probably has a better chance at staying at or above $30 than in 1973. OPEC has a more diverse composition, representing a broad range of geographic interests rather than primarily middle east nations, and is a far more economically sophisticated organization than it was 25 years ago. The current OPEC membership conrtols a larger portion of oil production than in the 1970s. And of course, as we've demonstrated, with a three fold greater depenence on imported oil now than in the 1970s, OPEC has the US over a barrel, so to speak. The group may choose to increase supply to keep the price under $30, but then maybe not. If $30 oil is good then isn't $60 oil better? Depending on price elasticity, of course. If the price of oil stays high long enough, domestic prodution that is not profitable at oil priced below $30 will come on line to compete with imported oil, and new conservation technologies that reduce demand will become cost-effective. In the mean time, a period of rising inflation and rising commodity prices is a reasonable expectation. On the other hand, the current rise in oil prices may signal the start of a secular trend.