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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (2056)	3/20/2001 8:12:06 PM
From: excardog	Read Replies (1) \| Respond to of 23153

some oil comments from a site I follow ( I tend to agree other than My target on the down side is $25 which is higher than theirs) Brent crude prices are falling, despite OPEC Production cuts. Our last report written on Feb.3rd was entitled "Oil Rally may Falter soon" and it did. The 2nd Brent contract hit its peak within the same week at a closing price of $28.75, and the daily high was just within our peak target of "near $29.50". Since then, there has been volatile trend towards lower prices, and we saw no need to change our commentary since it has remained on target. We think the market is headed for an important seasonal and cyclical Low, perhaps right in our cyclical target month of April 2001. Note: We focus on the 2nd futures contract because it tends to "chart" best. OPEC had its meeting last week and announced a production cut of 1 million barrels. We think that is not enough to keep prices from heading lower in the short term. Here's our view: 1. Demand normally shows a seasonal drop this time of year as winter demand ends and oil companies rundown their inventories. A deteriorating global economy (especially in Japan and the U.S., may cause a larger than normal fall-off in these two high-oil-demand countries.) 2. The new quotas do not take effect until April first, whereas the imbalance is already putting oil prices under pressure right now. And some countries may be slow to implement their lower quotas, 3. We see potential for an "overshoot" where Brent prices will drop to $22.50 or even $20 before panic kicks in and true quota discipline begins. Thereafter, we expect an important rally in oil prices back to $30 or even much higher later in the year. We see the current drop as a major "Buying window" and will get more aggressive if economic concerns push the price below $22.50. Our Forecast: EnergyI's Cycles suggest a Low in oil about April 2001. For Spring, we are targetting a drop below $25, and maybe to strong support at near $22.50 or even $20. We have left this forecast unchanged since last October and its still has a good chance of being a Bullseye.