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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Aggie who wrote (9288)	4/18/2008 9:29:30 PM
From: Sharp_End_Of_Drill	Read Replies (1) \| Respond to of 50746

Aggie, not addressed to me - but let me take a shot: >>>How much of this do you think is due to nationalization and parlay on the part of governments to change the deal (Russia, Nigeria, etc, in other words, a shifting business model in favor of nations instead of operators) as opposed to simply being a function of the harder-to-find-and-extract factor?<<< My answer is virtually all of it. Reserves are greater than ever before, production is too, and there is no shortage of good finds. The shortage is access to them, and the loss of previously sweet deals. Russian alone has enough reserves to keep the world chugging along for another couple of decades, but that just screeched to a halt with all the renationalization. >>>Second - How much of the record prices and demand difficulty is really a result of insufficient infrastructure - lack of refining, lack of storage and transportation capacity, etc, to keep up with ramping world demand?<<< My answer is none of it. There is an overcapacity of refining now, and a good slug more on the way. No shortage of storage, transport, etc. These are interesting times...

To: Aggie who wrote (9288)	4/19/2008 9:51:02 AM
From: jim_p	Read Replies (2) \| Respond to of 50746

RRI was a no brainer when it was selling below $2.00. I'm always looking for another one, but its not very often that a stock prices fall down to a level that you feel comfortable putting 100% of your assets in just one stock. I like to buy them when no one wants them like we did with HAL below $9.00, MDR below $8.00 and yes even PGO below $.50. Sure wish I had all of those shares back today. On WNR,gasoline inventories hit a 14 years high which caused the crack spread to decline. As a result the analyst piled on and all lowered their price targets and then S&P placed them on credit watch for possible downgrade and WNR has a fair amount of leverage. This all happened over a period of a couple of months. The stock probably should have never been trading up in the 60's, but it was trading around 25 when all of this happened. The reason I bought it is because gasoline stocks in PADD II where WNR sells most of its product has fallen sharply and is now back below normal. If you click on the first tab below (which is Figure 4 - Stock of Gasoline by PADD) you will see the gasoline stocks went from a 14 year high to below average in about 2 months. This will increase the crack spread and help their margins going forward. usasearch.gov I've been buying each time it falls down to 12 or below. It won't be a 10 banger, but a pretty conservative double or triple. I like to look at the macro picture of the world’s economy and what I see is that the world does not have the resources to support the current rate of growth. It’s not just oil, but the same things are happening with most commodities including the metals and food production. Supplies are now being rationed by price because demand exceeds supply for a large number of commodities. In addition we are starting to see country after country restrict the export of certain commodities to protect their own supplies and restrict prices. I suspect this trend will continue and the list of commodities will expand (including oil) as the problem gets worse and as the competition for scarce resources increases or the world expansion declines. From what I read oil consumption has exceeded production for the last three years despite record prices. I also believe that every barrel of oil that can be produced is being produced at today’s prices. Politics is restricting access to a number of places where oil is capable of being developed, but with the exception of Nigeria and Iraq all the oil that can be produced today is being produced. I don’t see a shortage of refining capacity or infrastructure causing any problems. While there have not been many new refineries built, there have been a number of sizable expansions of existing refineries. Jim