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 : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Frank Pembleton who wrote (2283)	9/29/2001 6:21:28 AM
From: Frank Pembleton	Read Replies (5) \| Respond to of 36161

Canada could have an answer to U.S. oil woes By MATHEW INGRAM Globe and Mail Update Why does the United States have to tiptoe so carefully in the Middle East, trying to play one country off against another, careful not to upset certain countries? Why does it even have to get involved in Middle Eastern politics in the first place? One word: Oil. Without the supply of oil that countries such as Kuwait, Iraq, Saudi Arabia, Iran and others produce, the United States would be in deep trouble. And so, the U.S. government repeatedly finds itself drawn into a volatile morass of shifting allegiances. Is there any long-term solution? Environmental activists have recommended for some time that the United States pour billions into alternative energy such as wind power, biomass and fuel cells - but there is no way these technologies could handle a fraction of the current demand for energy from fossil fuels, let alone the growth projected for the coming decades. But where else could the U.S. come up with the oil to satisfy its needs? The U.S. government itself mentioned one possible solution in Vice-President Dick Cheney's recent energy report: Alberta's oil sands, a vast ocean of tar-like goo in the northern part of the province. By most estimates, there is more oil in the so-called "tar sands" than there is in all of Saudi Arabia, or about 300 billion barrels that is recoverable using existing technology. That's enough to supply the United States for more than 40 years — plus there's another 1.5 trillion to two trillion barrels on top of that, which would be harder to extract. That's 10 times what Saudi Arabia has. Alberta's potential was obvious even before Sept. 11, and those attacks have now added even more fuel to the argument. What if Iraq turns out to be involved in planning the attacks? Even worse, what if Saudi-born terrorist Osama bin Laden decides to turn his wrath against the Saudi royal family, whom he despises for allowing U.S. troops to be stationed in the traditional birthplace of Islam? Saudi Arabia has about one quarter of the world's reserves of conventional oil, and last year it supplied the U.S. with 1.5 million barrels a day, or about 17 per cent of U.S. demand. Almost one-quarter of U.S. demand for oil is supplied by countries in the Persian Gulf. One of the reasons why the oil sands haven't played a larger role on the public policy stage is that until fairly recently, getting oil out of the ground in northern Alberta was time-consuming and expensive. Until the mid-1990s, producing a barrel of oil cost upwards of $15 (U.S.). That didn't leave much room for things like profits when the price of oil was at $20 — and it seemed especially ridiculous given that some OPEC countries can produce a barrel of oil for about $5 or less. Then Suncor Energy, thanks to prodding by vice-president Dee Parkinson, cut a huge chunk out of its costs starting in 1995 by moving from the balky and expensive bucketwheels it had been using to giant shovels and trucks. Suncor and Syncrude (which copied the move) have cut their costs to $9 a barrel — and that success, combined with the runup in oil prices over the past couple of years, has spurred dozens of imitators to look at oil-sands projects. Conoco, Exxon-Mobil, Shell and other companies both in the United States and elsewhere have done feasibility studies, and more than $20-billion worth of potential oil sands projects are in the planning stages. There are also dozens of projects aimed at exploring ways of extracting some of the harder-to-reach oil. The current method is not very different from the Clark hot-water process, which was discovered in the 1920s — and that itself was a refinement of the way early explorers boiled the gooey substance in water over the campfire to produce a tar they could patch their canoes with. Newer methods for extracting the oil involve things such as "steam-assisted gravity drainage," which involves injecting steam into the sand and then forcing the oil to drain out for refining. In the 1930s, the U.S. government and several business leaders (including Henry Ford) reportedly looked into extracting oil from Alberta to help meet the growing demand in the United States. But then oil was discovered in Saudi Arabia, and the seeds of OPEC and the energy dominance of the Middle East were sown — something the United States may want to reconsider in the light of current events. And then maybe Canada could take the place of Saudi Arabia in the American universe. globeandmail.com

To: Frank Pembleton who wrote (2283)	9/30/2001 10:54:08 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 36161

S&P 662 = historic avg valuations & another 33% drop ["He summed up by saying that if the market returned to 40-year average valuation levels, the S&P would fall to 662, down another 33 per cent. If it retained recent equity appraisals, it could bottom out between 800 and 900'] ["The first speaker was Douglas Cliggott, portfolio strategist for J. P. Morgan Chase. He has been, in my opinion, Wall Street's best and brightest strategist for three years. He lacks the image or reputation of Abby Joseph Cohen (Goldman Sachs) or Tom Galvin (Credit Suisse First Boston). Unlike them, he has been right about the market -- and for the right reasons. Doug is a low-key, scholarly sort of presenter. He gave a detailed historical analysis of the S&P 500 (the broad U.S. equity benchmark), which was trading at about 1,000 as the meeting began, down from its all-time high of 1,527. He argued that equity risk remains as high as ever, despite the big selloff. Doug said his peers were bullish because they still were using earnings numbers for next year close to $50 per S&P "share" -- a measure that pretends the S&P costs $1,000, then calculates its profit according to the precise weighting of each index company. This suggests a price-earnings ratio of merely 20, the lowest in many years. Doug said $34 was the kind of number we should expect in the light of the rapid deterioration of the economy in the weeks before the attacks, and the terrorists' huge hits to travel, durable goods purchases and other discretionary buying. He said corporate America had been hanging on to excess staff waiting for an economic upturn; now they will throw in the towel. That $34 number suggests the S&P's multiple is closer to 30 than 20, and bear markets have tended to end with the multiple at half that level -- or less. "] ...the "ripple" effect on US corporate earnings, on consumer spending & sentiment and most importantly - on Employment/Unemployment is being vastly miscalculated imo. But, some sectors are developing value opps and surely there will be some swing trading opps as well; but nothing is in the cards to stop the continuation of the BEAR and imho - we see DOW sub 7,000 and an event driven fall to the 5's would not surprise me... and the NAZ is going to triple digits; ie: sub 1000. Oil & Oilpatch stocks are especially interesting for a swing trade as we at any moment can see a "WAR-Oil Supply Disruption/PREMIUM" applied to the price of Oil and Oil stocks... the question isn't so much as to "what" that premium/value is... but, rather that it's when, not if - there will be one assigned and given that we've went from OSX 120 to 58 in a straight line and that OSX 48-50 is the recent historic technical & valuation bottom - that intra-day "TURN" we just saw looked the the Street endorsing that given the "premium" is a when, not if scenario.... that an interim bottom & thus a swing trade was in the cards. ...interesting times. FOX reports today that an Iraqui scientist who just defected says Saddam has 3,000 scientists working 24 hours a day on biological weapons, but that his nuclear program is non-existant. He is also presently testing his biologic's on prisoneers and his missles and/or unmanned drone's capable of transfering the biologic's up to 800 miles - which makes Israel, Turkey & Saudi Arabia as targets. That we will not have a land/occupying force in Iraq and that we will not take out Saddam is appearing less & less likely by the moment. Saddam & not Bin Laden is the real "Most Wanted Man" in this War on Terrorism... and investment/trading decisions need to be factored on the likelyhood of both possible acts of desparation from Saddam, as well as likely Oil Supply disruptions and an active US led Land Force going into Iraq... We may have DOW 6250, S&P 650, NAZ 800 and $60 Oil and $600 Gold....before this is all over....remember those numbers; as it was mere months ago that no one would have thought we'd be at OSX 58 DOW 8200 and NAZ 1400 again, or that Gold Stocks would be leading the market up 72% over the last 52 weeks, or that we'd experience human losses in a domestic act of War greater than those of Pearl Harbor... GOLD/Silver...how much ya' got ?