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.

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

To: Art Bechhoefer who wrote (92309)	7/15/2001 1:13:42 PM
From: Box-By-The-Riviera™	Respond to of 95453

so... how many years will the slump last before the trend asserts itself? just want to know how long to hold my losing positions.

To: Art Bechhoefer who wrote (92309)	7/15/2001 3:01:17 PM
From: Frank Pembleton	Read Replies (1) \| Respond to of 95453

investment advisor and also an energy research analyst I'm sure that title would go over well with the people of Alberta in the early eighties <lol> Here I am living on what is the largest in oil reserves on face of the planet, yet the threat of seeing people loose their homes is very real, yet again. In fact the price of this commodity is trending down, therefor the quarterly reports are not going to show growth, if there is no growth, there is no investment. Don't count on the Middle East to maintain prices, these people are held together by one common bond, and that's hatred. Not a good sign... As an investment advisor it's your job to protect your clients money. The trend is down, if there is any doubt check out Big Dog's portfolio: Subject 50987 ...and please advise your clients to hold cash. Regards Frank P.

To: Art Bechhoefer who wrote (92309)	7/15/2001 3:49:04 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Art B re: your comments First, the TREND is clearly not the oilpatch Bulls friend here of late... not with "7 consecutive downward demand revisions" from the IEA. Secondly; any production shortfall by the Majors, Integrateds, or E&P's will gladly be marketshare eaten up by OPEC. Art in my opinion; your point on the production shortfalls by US & Intl Producers doesn't build a bullish case for their LT shareprice, or even Oil prices; let alone the Cap Ex trend needed to buttress a further OSX rally; but rather merely points out the grim reality in the trend for OPEC to continually build Global market share; which exacerbates our dependance on foreign oil. Unless the US Government is willing to subsidize the Oil Majors; I don't think XOM, CHV, or anyone else is going to fail to react to market prices & volatility and OPEC is now "large & in-charge" of volatility... it's become their best weapon & best friend. XOM in this recent record price environment for O&G; commited a less than historic/mean average % of Cash Flow for Cap Ex. I think they realize that OPEC will introduce some volatility here. For the near future I don't think OPEC will have any problem picking up any slack from the producers to meet global demand. I think the Saudi's in particular; are addressing their "capacity" issue with the foresight of eyeing ever larger pieces of the global marketshare pie. The oilpatch will for the foreseeable future remain a "hot money" speculative cyclical sector as far as shareprices are concerned. I don't see the "boom to bust" cycles for shareprices ending anytime soon and OPEC has learned that Oil Price volatility (if managed) is the key to gaining market share. The smartest thing OPEC could do here & now; is to take Oil down sharply to $15-$18. That would nip in the bud, the LT Cap Ex commitments from the Majors & non-OPEC producers. I don't think OPEC will allow prices to be sustained here to the level that non-OPEC producers will bring LT Cap Ex Project/Solutions to market that will take their market share. As far as Energy Stocks are concerned; there will allways may be subniches that ride out the cyclical storms with less volatility... as far as individual stocks - P CHV XOM may, CPN, NRG, DYN, ENE, ORN may be a niche to play, or maybe SGR & FLR will be ? - but, none of them, UCL included; have escaped the recent energy downdraft & shareprice volatility. For the domestic Nat Gas story; LNG, Coal, or even revisiting nuclear; along with alternative fuel development may dampen the prospects of those who see a sustained new paradigm for Nat Gas. Personally; I'll give Nat Gas a higher "floor" for now; but not as high as many think... same boom to bust cycles; just better spin and a better promoted "sizzle" to the Bullish Story this time... and we still "busted" and if the economy continues to slow - we might not be done..."busting" yet. I hope that most individual investors have learned via the NAZ Tech Wreck and yet another volatile Oilpatch Cycle; that the next time they hear - "this time it's different", or "we're entering a new paradigm/era" - it's time to start quickly "averaging out" into any & all further strength & to set tight/trailing stops.... because those words are now synonymous with the coming blow off stage of a sector cycle. Many of us will agree to disagree; but it's good to see excellent point/couterpoint commentary from the likes of Art B & Meridian here... For now; I'll remain - "once bitten - twice shy" (VBG) and all my Oilpatch Bull money is in the register; under lock & key - they "aint" getting it back & I don't anticipate an interim bottom being tempting enough for a "portfolio weighted" re-entry. A small trade, or two ? - surely; but no portfolio weighted re-entry... not untill BOTH - the global economy turns up AND the supply build trend strongly reverses. Untill then, I see $18-22 Oil (wouldn't rule out $15-$18) and $2-$3 Nat Gas coming; and while those are still profitable price decks; they are NOT what new paradigms, or higher/highs for this cycle are made of... In cyclicals; it's the "sizzle" that sells - not the steak and this cycle's sizzle/story is beyond well done - put a fork in it.

To: Art Bechhoefer who wrote (92309)	7/15/2001 5:57:05 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

Art B... you & Matt Simmons are right; but -> ... you're both about "10 years" too early. ie: research.cibcwm.com In my most humble, non-industry professional, non-money manager/analyst... one man/one trader opinion: ...I'd suggest that the general thesis that both you & the Matt Simmonsites espouse; is about 10 years too early. For the next decade OPEC is in charge; as their "Hubbert Curve mid-point" will not be reached untill the year 2013. Where Matt Simmons is right; is on what US Government Policy should be - but, he's not right on his nearterm Oilpatch shareprice bullishness, as there is no way that XOM, CHV, or P; is going to spend a single Cap Ex $ that is conducive to US Energy Policy, but not to shareholders, or their NEAR TERM bottom line and untill commodity prices reach a sustained pain-threshold for US consumers... nothing is going to change & it's going to be 10+ years before OPEC can't step in & fill any global demand needs - so that pain/price threshold level won't be reached for another decade at least in my opinion. These are global companies & the US is merely their most lucrative & captive customer... saving America is not Job #1 for Lee Raymond, Bob Allison, or C.R. Palmer... managing Cap Ex, minimizing costs, maximizing profits and SURVIVING is JOB #1... Back in late 1998 with $10 Oil & predictions of an endless glut of $5 oil - no one came running to save the US Oilpatch from the brink of collapse... so don't expect Raymond, Allison,or Palmer to do anything other than manage their bottomline. Clearly, the US needs to bring Energy Policy to the forefront; as we can't wait untill OPEC controls a degree of market share, to where whatever we do Energy Policywise, it matters little. But, how do you convince the Oilpatch & Energy Industry to commit the type of LT Cap Ex $ necessary HERE & NOW, or more importantly; into $18 Oil & $2.35 Nat Gas over the next 5-10 years if prices revert to more historic means; to solve the building energy problem/shortage/crisis (whatever term you choose)when it's not in their best corporate interest to do so ? Unless the US Government subsidizes the US Energy Companies, uses massive tax incentives etc... nothing is going to change. American's need to decide if they want huge social & restrictive environmental programs, or cheap Oil & Gas... they can't have both. Drilling in Alaska & offshore Florida are solutions that haven't been welcomed with open arms by America... as in all things; it depends on the price to pain meter. We got close this past winter with the Nat Gas/Winter Heating spike. We got close with $2 gasoline... but, close isn't enough to push the majority of Americans into politcally supporting the solutions necessary to America's Long Term Energy needs. $50-60 Oil and sustained $10+ Nat Gas; along with $4-$5 gasoline will however... and imho; on a boom & bust cyclical basis - that's where we'll gradually work our way to. With those price levels occuring atop the boom to bust Oilpatch cycles within 10-12 years... But, then & only then - at those price levels; will Energy ever become a political priority with the American people & thus - then & only then; will we ever have the political support & will; to create a LT Energy Policy Solution. Untill then - it's all OPEC and I think that XOM et al - realize that... and that's why they refuse to make the type of longterm Cap Ex commitments here, that many think they should. OPEC has the ability to open the spiggots here & crash Oil to $15; which would collapse the very type of LT Cap Ex projects necessary to address US Energy needs; so what do you think XOM, CHV, P et al are going to do - if/when Oil Prices contract here ? ... help solve the US problem, or cut costs, reign in Cap Ex & maximize profits ? Bottomline; I think we will have at least another decade of Boom & Bust - volatile cycles ahead; untill OPEC reaches a production decline to where they no longer can step in to meet demand and prices ultimately reach a pain threshold level to where America bites the bullet...and $35 Oil, $10 Nat Gas and $2 gasoline weren't enough... we're 10-12 years away imo from both a real crisis & a real solution.