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

To: TechTrader42 who wrote (11791)	7/16/2001 2:45:49 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 52237

Thank you for the compliment. :) The Pollyanna analysts seem to be anticipating some positives, such as an expected increase in spending on international drilling. They are not Pollyannas, they are whores in the business of selling depreciating assets to the unsuspecting. An increase in international drilling? The world capacity to add new rigs is about 25 copies per year. There are currently ~1,050 rigs spinning on N. America seeking gas today. The Mid-East has no significant exploration at present. Indonesia's main fields are in steep decline and exploration there is not discovering replacement reserves. The much touted Vietnamese and Chinese off-shore explorations have proven to be a bust. What international growth? They say, too, that there's been an overreaction to the factors you mention, and to the decline in U.S. drilling. Refinery profits on products, i.e. gasoline, fuel, jet A, were at an all-time high at $14.00/bbl in early April. Today they stand at $2.00/bbl. Considered by most industry observers to be "breakeven". Who's overreacting to a mature industry that ain't making money? Decline in U.S. drilling? Huh? N. American rig count was 550 in early 2000. Today, as I said, it's at 100% utilization at about 1,050 rigs looking for nat gas alone. The industry is running flat out. What decline? Am I missing something here? All I know is that oil is said to rise to the surface. Ahh, so modest. I've observed you know quite a lot more than that. But appertaining the analysts, they say that in business the scum also rises. Whether that goes for oil prices is another thing entirely. I have observed that a 1% supply/demand shift generally results in a 50% price swing. Such is the nature of pricing on the margin. So, with the NGL complex in the toilet, can the rest of the awl complex escape unscathed in the face of a worldwide slowdown in demand? The analysts would have you think so...... Cheerio!