Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: edward miller who wrote (25095)	7/9/2000 6:27:29 PM
From: dennis michael patterson	Respond to of 42787

ed, I really don't follow energy stocks. Same with drugs. And I am poorer for it!! I could have bought SGP at 30. I used to own it! And RIG-- same thing. My opinion is worthless. Really. I only know technology

To: edward miller who wrote (25095)	7/9/2000 9:08:40 PM
From: Kip518	Respond to of 42787

Ed, IMO you should stay the course on NG at least into next fall/winter. Prices are only going up as more utilities switch to gas-burning. BTW - Here's an interesting piece from the London Times (July 6). While it's about oil prices and a British company, it has relevance for NG as well. Sheikhs rattled by role of a UK gas generator company CROWN Prince Abdullah of Saudi Arabia is fretting about the price of oil. He is worried that it is too high and on Monday Saudi Arabia threatened to pump more oil from the country's wells in order to get the price down. The prince's anxiety is curious. He is a heartbeat from leadership of the world's largest oil producer. Saudi Arabia is the most powerful member of Opec, the oil producer's cartel, and the recent surge in the crude price to peaks of $32 should generate a multibillion-dollar budget surplus for the Kingdom. One reason for his concern can be found on a scruffy industrial estate near Heathrow. Home to Turbo Genset, the high-tech engineering company that announced on Tuesday, the day after the Saudi threat, plans for a London Stock Exchange flotation. Turbo Genset makes small-scale electricity generators and has patented a novel alternator that can operate at high speeds from a gas turbine without the need for a gearbox. It is a fraction of the size of an equivalent diesel generator; a 40 kilowatt Turbo Genset power unit weighs just 100 kilograms, occupies roughly the space of a large chest freezer, is very efficient and can run on natural gas, biogas and even vegetable oils. Turbo Genset owns one of a plethora of technologies that are changing the energy rulebook in ways that should reduce dependence on oil. Fuel cells, gas-to-liquids technology and hybrid petrol/electric vehicles are a threat to the Saudis, explains Mehdi Varzi, oil analyst at Dresdner Kleinwort Benson. "We are on the verge of a post-oil era. Within this decade a lot of existing technological developments will contribute to the long-term demise of oil." It is already happening in the US where Toyota is selling its Prius, a hybrid petrol/electric car. The technology on trial at Heathrow should help Americans to limit the risk of summer power brown-outs from an overstretched power grid. It could also reduce dependence on imported heating oil in the North East. Detroit Edison, an American utility, is commercialising the Turbo Genset device with plans for micro-grids of small-scale combined heat and power units for housing, offices and hospitals. Work is forging ahead on fuel cells, devices that convert hydrogen fuel and oxygen into electricity and water. Ballard Power Systems, a fuel cell manufacturer, is working with Ford and DaimlerChrysler on an electric fuel cell car, while Plug Power is conducting trials of a fuel cell power unit for use in the home. A frightening prospect for Saudi Arabia: its vast oil reserves could become redundant before they are spent. It is an unpopular idea in the Kingdom. Crown Prince Abdullah and the Foreign Minister, Prince Saud Al-Faisal, are at odds with conservatives in the Saudi Royal Family, the establishment and Saudi Aramco, the national oil company. High prices mean less pressure to cut costs and admit foreign investors. But Prince Abdullah fears the reaction of the Kingdom's biggest ally, the United States, where consumers are screaming about $2 a gallon gasoline. He also fears the impact on demand for oil. As Mr Varzi puts it: "High prices politicise oil. At $30 per barrel, almost any form of energy becomes economical." That means more money for boffins in sheds at Heathrow but it could also have a more dramatic near-term effect: a weakening of demand for crude and a simultaneous rise in investment by Western multinational oil companies, ultimately leading to another crude price collapse. Signs of weakening demand were reported recently by the International Energy Agency and companies such as BP Amoco are beginning to ramp up investment, but the signals can be interpreted in many ways. Saudi hawks blame the price peak on speculators and a media obsessed with US petrol prices. Shortages in America can be partly attributed to new green fuel regulations. Ironically, a rise in Saudi output may do little to appease angry US motorists. Saudi crude is "sour", less suitable for refining into petrol than light crude from Nigeria or the North Sea. Saudi crude prices have therefore failed to keep pace with the surging Brent or West Texas Intermediate prices. The oil market is only nominally a global one. But Prince Abdullah has another worry - the dash for gas. If the oil multinationals are beginning to increase their budgets after the 1998 oil price collapse, their focus has been in building markets for natural gas. Saudi Arabia has about 4 per cent of the world's known gas reserves, a major resource albeit a minnow compared with Russia which accounts for a third of the total. But gas is more expensive to ship than oil and Saudi Arabia lacks a big local market. While its neighbours, Oman and Qatar, are developing gas export markets in Asia, Saudi gas remains underground. But gas rises faster than oil and, once again, technology is not on the side of the Saudis. Not only is natural gas the preferred fuel for power generation but oil multinationals are now promoting gas-to-liquids (GTL) plants in their efforts to monetise isolated gasfields. Shell is to build a 70,000 barrel per day GTL plant in Indonesia, while BP Amoco plans a facility in Alaska, turning Prudhoe Bay's unexploited gas cap into liquids that can fill the tanks of US cars. It is small wonder that Prince Abdullah has annoyed his Opec partners this week. But he knows that today's bumper profits are merely windfalls. The Kingdom's internal debt is some $100 billion (£66 billion) and in the last oil price crash, the Government was forced to borrow $8 billion from United Arab Emirates and Kuwait. The crown prince would like to cut expenditure - some 16 per cent of gross domestic product disappears into the mouths of Western arms manufacturers. But Saudi Arabia has some difficult neighbours and a population unaccustomed to belt-tightening. The short-term objective is to bring the oil price down to $25 but even that price is too high for Saudi Arabia, long term. As Leo Drollas of the Centre for Global Energy Studies says: "$25 is unsustainable when non-Opec oil can be produced profitably at $18." The crown prince is doing his best to keep the family business ticking over but the next generation may find it more difficult still.