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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (123035)	8/5/2009 5:29:10 PM
From: GREENLAW4-7	4 Recommendations Read Replies (4) \| Respond to of 206316

Paul, There are many good folks just like you who come to this site for the best information on the OSX/XLE sectors. The recent moves in both Oil and the Market make some old timers like me very nervous about what lies below the surface. I am a trader who has traded this sector in good and bad economies. Today is something that has many very confused to watch as we are at all time highs on supply, and Demand is extremely low but we have a product trading at 72BBL. The old days in OSX land we would move on the number and it would have been much lower. So as you can see, many othere are watching and wondering how this market holds here or even if it breaks higher. be nimble and play the trends.

To: Paul Senior who wrote (123035)	8/5/2009 7:29:33 PM
From: JimisJim	3 Recommendations Read Replies (1) \| Respond to of 206316

I can understand your discomfort... FWIW I am still holding a small position in RIG that I've had for some years... however, I did shed all of my trading shares in it during this last little runup to take profits... I still believe that RIG is the best driller to own if you're going to own a driller... they are unmatched in the deep and ultra-deep segment in terms of fleet quality and operations and that segment of their biz continues to command very large dayrates even for new-builds still under construction. RIG got whacked primarily by one-time charges and the death spiral this year in the shallow and mid-water segments (right after jumping into those segments hard by buying/merging GSF's fleet) and stacking jackups all over the place -- just like every other driller in shallow and mid-water. If you strip out the one-time charges, RIG actually did OK and met most expectations. Going forward? I will keep my smallish position and add trading shares again if the share price takes a big hit. Long term, I think RIG is a buy... for traders like GREENLAW, however, it is a different story and all OSX stocks are in for some very volatile times -- I try to swing trade the sector to profit from the volatility, but sometimes am too busy (like now, offshore) to make frequent trades or babysit short term positions... FWIW, I don't always agree with GREENLAW, but I find his posts quite valuable and probably agree with him much more than 50% of the time or more when talking about short term in OSX stocks. People here all have different time horizons that determine ultimately what are good or bad trades for them. As for the more general discussion on oilpatch, I can only repeat what I've already posted today as I await transport to shore only to turn around and head out to another platform: "FWIW, quick note... big discussion at chow today with guys who literally have been to every corner of the world's oilpatch in recent weeks/months about how the story nobody is reporting is that field decline rates on ave. around the world are about double what's been reported even by the usually reliable inside industry outlets... Speculation on how this factoid coupled with production cuts, project delays/cancellations vs. MSM-reported over-supply and demand softness will affect POO ST/IT/LT... consensus seems to be that decline rates + production drop off/delays/cancellations will put floor under POO at higher level than some predict (we've all read the $20 POO stories based on "glut" of supply glut stories)... while ST/IT glut of already produced oil plus softer demand will cap POO... i.e., POO could be range-bound for ST/IT into 2010 in the $60-$90 range with lots of volatility. Take above with huge grain of salt as its source is a bunch of greasy rig rats -- would love to know what their desk-bound execs/bosses are thinking wrt to ops planning at various POO levels, i.e., what POO are they modeling for their ops for the next 6-12 mos.? If I get a clue, I'll post it. Jim" ----- And: "This is the only piece I've seen that discusses the pts. in my previous post (from The Oil Drum website): IEA Economist Warns about World Oil Supply Posted by Gail the Actuary on August 3, 2009 - 9:15am Topic: Supply/Production The UK newspaper the Independent today is featuring an article titled Warning: Oil supplies are running out fast. The article is based on an interview with Fatih Birol, Chief Economist of the International Energy Association. In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010. >snip< There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields. The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong. A change in the decline rate on existing fields from 3.7% per year to 6.7% per year is a big change. If the IEA made such a big error in the past, how certain is it of its current decline rate estimate? If demand stays at the current level, Dr. Birol indicates that the equivalent of four Saudi Arabias will be needed; if it increases to the level of forecast demand, the equivalent of six Saudi Arabias will be needed." ----- And finally: "I think, based on what I've been hearing, that decline rates are even higher than the new IEA estimates... could be nearing 9%-10% on ave. worldwide -- but there's wiggle room in there as my associates point out that there are some interesting EOR tests going on right now that have a chance -- someday -- of being a game changer since over half of all oil discovered remains in the ground and unrecoverable with present tech... but in the same breath, the same guys also say that any significant breakthroughs in EOR are not going to be discovered, developed and actually brought to market in any significant way for at least 2-5 years even under the rosiest scenarios -- most put such an event optimistically perhaps in the 5-10 year range but most believe any new EOR tech will be incremental and not as dramatic as say the breakthroughs that led to unlocking shale gas in No. Am. Jim" ---- Apologies to anyone who already read my posts at the NRS thread here on SI today... That is my primary hangout on SI.