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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (18036)	8/25/2004 12:06:56 AM
From: que seria	Respond to of 110194

That sanguine drilling response by E&P companies to high prices helps assure the next cyclical move up will be bigger, on a weather-adjusted basis and barring worldwide recession. as we have mentioned many a time, capital spending in the industry likewise is telegraphing the current message that macro crude pricing strength is transitory. Again, we really have no way of knowing where exact near term crude pricing will go over the short term, but it sure appears to us that there is a mile of room for financial market price reconciliation if indeed crude stays near the half century mark for any extended period of time as we move forward. I just wish I'd waited to buy my junior E&Ps; I sure didn't expect such a sorry share price response to this move in crude. If oil retreats and we get some shoulder season gas pricing in the Fall, it should be a great time to buy the commodities or the stocks.

To: ild who wrote (18036)	8/25/2004 10:17:57 AM
From: mishedlo	Respond to of 110194

The energy stocks themselves have sold down from recent highs while crude has moved up a good 15% over the past month or so. If the energy stocks don't believe crude pricing strength is sustainable, then why should the broader market, right? And, as we have mentioned many a time, capital spending in the industry likewise is telegraphing the current message that macro crude pricing strength is transitory. Again, we really have no way of knowing where exact near term crude pricing will go over the short term, but it sure appears to us that there is a mile of room for financial market price reconciliation if indeed crude stays near the half century mark for any extended period of time as we move forward. I say the market correctly views this as recessionary AND with little of those oil price hikes being passed on. That would be my take as well. Mish