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

To: Big Dog who wrote (67020)	5/25/2000 9:56:00 AM
From: Terry D	Respond to of 95453

BD - It's a state of mind, its not a place - well that part I understood from Willie and Lyle and "All the Pretty Horses" and Louis L'Amour .. To paraphrase Mr. Lovett - That's right - I ain't from Texas. But I love the stocks - even those from Tulsa (been there - yech) like PKD. t d

To: Big Dog who wrote (67020)	5/25/2000 9:58:00 AM
From: Tomas	Respond to of 95453

The cheap oil honeymoon is over - and is that a bad thing? "Truth be told, if you collected and burned all the paper profits of this year's dot-com initial public offerings, it still wouldn't be enough to heat a single home." Globe & Mail, Thursday May 25 By JOHN DRISCOLL You've probably noticed that the recent tectonic shifts among the world's oil producers mean our 14-year honeymoon of cheap oil is probably behind us forever. For Canadians, the economies this will bring are not such a bad thing. Not since 1973, when the Organization of Petroleum Exporting Countries began the production quota system that sent oil prices spiralling 10-fold to $40 (U.S.) a barrel, has the cartel been able to assert its political will so strongly upon world oil markets. With worldwide demand expected to be close to 80 million barrels of oil a day in the fourth quarter of this year -- more than twice the consumption rate of 30 years ago -- OPEC producers are clearly back in the driver's seat in setting prices. And they fully intend to keep things that way. The non-OPEC producers simply do not have the production capacity to meet demand, and will have to toe the cartel's line. From gas tanks to Arab banks, the cash will continue to flow for the foreseeable future and consumers will continue to pay. The harsh reality is that after a few lucky bumps in the road for consumers, we are headed back to a future envisaged by energy analysts during that first oil price shock. But just how bad is it really? As consumers, we have been terribly spoiled, married as we are to cheap oil. We conveniently forget that here in Canada, we pay about a third of the amount that Europeans pay for a litre of gasoline. And we fail to notice that prices in every sector except consumer electronics have increased faster than those of crude oil during the past 40 years, especially the automobiles that are so dependent upon petroleum products. What does it all mean? It means that since 1986, when OPEC solidarity cracked at the seams and crude oil prices plummeted, consumers have been living in a la-la land of false price security. So have governments. The biggest price component of gasoline is tax: excise tax, federal tax, provincial tax and goods and services tax. Since demand for oil shows no sign of abating -- most of the growth in demand will come from emerging Asian and Latin American countries -- new reserves will have to be found. The capital required to fund the new Hibernias and heavy oil sands projects of the world requires crude prices around $25 a barrel and up, or massive government subsidies. The good news is that higher oil prices are beneficial for Canada. They produce a healthy base for the petroleum economy and provide needed employment in otherwise marginal or depressed geographic areas. They also enforce economies on both government and industry, as well as in the household, where common sense about energy use has become uncommon. Economies are not the only defence against high energy costs. Now is an opportune time for Canadians to profit by purchasing Canadian petroleum company shares or other oil and gas investments. This strategy not only serves as a hedge against rising oil and gas prices, but also represents value investing in a pure form, based as it is on a hard commodity that is devoid of the nebulous nature of the dot-com sweepstakes. Truth be told, if you collected and burned all the paper profits of this year's dot-com initial public offerings, it still wouldn't be enough to heat a single home. John Driscoll is president and chief executive officer of NCE Resources Group of Toronto globeandmail.com