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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sam_o who wrote (56202)	7/7/2000 10:13:11 AM
From: pater tenebrarum	Respond to of 99985

well, i'm sure it would be great news for the drillers, no doubt about that. as for gold, it seems it has lost its correlation with crude and the CRB, so i don't know if it would react. generally i think as soon as crude say went over $40 bbl., equities would fall sharply, ex oil majors and drillers, all of whom would of course profit from such a move. in the end, the oil price would however soon come back down again due to a collapse in demand if prices were to rise that high. regards, hb .

To: sam_o who wrote (56202)	7/7/2000 10:32:33 AM
From: Sweet Ol	Respond to of 99985

It is my understanding that the Saudis have not exploited their fields to maximum economic potential. In other words, they can increase capacity by drilling more wells. That in itself does not increase their reserves, it just increases their production capacity. My guess is that they will increase capacity to keep a reserve on hand for several years to come. Last weekend I had a conversation with a friend who is a well known consulting reservoir engineer. In his opinion a significant cause for the decline in production in the US is lack of economic incentive and really shortsighted policy and restrictive laws. I find it very difficult to believe the Saudis really want $25 oil when they can have $30 oil. It would seem that a more rational policy would be insure that there are not major shortages, but still keep supplies tight. Give people a year of $2.00 gas and they will get used to it and the political pressure will go away (INHO). John