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

To: Roebear who wrote (60514)	2/18/2000 6:54:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Energy sector starting to sizzle - Financial Post, February 17 Ian McKinnon CALGARY - Relatively cheap energy stocks despite high commodity prices and rising earnings are prompting some analysts to predict the return of the momentum investor. Momentum players are being attracted by the "ludicrously low" evaluations oil and natural gas players, said Andrew Hogg, a Calgary analyst with Yorkton Securities Inc. "The upward pressure is becoming so large that when the energy sector moves, it's going to be fast and furious and that's going to bring the momentum players back in," he said. "The people we need to move in to drive the stocks are the momentum players. The question is when are they going to start coming in? It's my belief that they're starting to come now." The TSE oil & gas subindex, which closed down 0.3% at 5907.41 yesterday, has risen 7.9% since last Friday, largely because oil prices hit nine-year highs of $30 (US) a barrel. Mr. Hogg expects a rally of 30% to 50% in energy stocks by late summer as a result of record U.S. demand for gasoline, strong oil prices for the rest of the year and reduced drilling in the United States and OPEC countries. Members of the Organization of Petroleum Exporting Countries may boost production but the increase will not be enough to offset roaring demand and low inventories in the United States, he said. Yorkton this week bumped its oil price forecast for 2000 to $24 (US) a barrel, a conservative figure since actual prices plus the forward future strip for the rest of the year yield an average of $26.50, Mr. Hogg said. The average price for energy firms covered by Yorkton has fallen to 10.4 times estimated 2000 earnings versus a historical average of 20 to 30 times. High gas prices ought to attract the attention of investors looking to take some profits from high-tech firms and rotate into other sectors, said Peter Linder. The energy analyst in Calgary for Harris Partners has an aggressive gas outlook of $3.25 per thousand cubic feet this year because of rising demand, declining established fields and firms' inabilities to bring on large volumes in the short term. "I think what is going to be needed is the Street appreciating just how cheap the stocks are and that's going to be happening over the next couple of weeks as fourth-quarter results are released," he said. "One of the big criticisms of the industry was its lack of return on investment. Well, the industry will definitely give investors an excellent return this year." While Tom Ebbern, at Newcrest Capital Inc. in Calgary, said his firm hasn't altered its forecast of $22 (US) a barrel for 2000 and $20 in 2001, OPEC raising output after its March meeting might ease concern about the sustainability of prices above $20 (US). canoe.ca