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

To: Haim R. Branisteanu who wrote (68037)	1/30/2001 7:30:37 PM
From: Mark Adams	Respond to of 99985

I haven't finished reading this, but you might find it of interest. From msdw.com Observation 1. Oil price response to GDP changes. This is an attempt to measure the "demand effect," i.e., how much should oil prices fall if global demand weakens? Using data from the 1973 to 2000 period, we find that a 1% GDP shock in the US translates into an 8% change in oil prices, ceteris paribus. Because emerging markets are more energy intensive than the US, a 1% world GDP shock translates into a 12% change in oil prices. In both cases, the maximum effect is felt about 1 year after the initial shock. Thus, if we believe that US growth is decelerating from 5% in 2000 to 1.1% in 2001, then the 4% deceleration should translate into a 30-40% correction in oil prices. Clearly, there are several simplifying assumptions behind our calculations. (Specifically, we rule out responses from OPEC, the particulars concerning the supply-inventory situation in the energy sector, and the trend rate of growth of oil supply in the world.) One point to make here is that the magnitude of correction in oil prices is roughly consistent with our assumption of oil prices underlying our economic forecasts, that oil could fall to US$18 a barrel by June. However, timing-wise, the decline in our oil price assumption is sharper than our calculations suggest.

To: Haim R. Branisteanu who wrote (68037)	1/30/2001 7:57:58 PM
From: McNabb Brothers	Read Replies (1) \| Respond to of 99985

Very interesting that you believe in all of that! Not saying it is all hog wash, but if that is the case why do we not have all republicans in office all the time! If they are so smart it would seem to me they would always be elected to office! Hank

To: Haim R. Branisteanu who wrote (68037)	1/30/2001 8:08:11 PM
From: diana g	Read Replies (1) \| Respond to of 99985

Your post shows a profound lack of knowledge in regard to the oil business and the international oil & oil products markets. You surely have a right to your opinion, but I suggest you think twice in future before expressing it in regard to an area where you obviously are not only ignorant but laughably misinformed. You just make yourself look an idiot to anyone who is aware of the facts and has even a moderate degree of understanding of how the oil business & markets work. ---d