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Gold/Mining/Energy : American International Petroleum Corp -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (6368)	1/5/1998 5:24:00 PM
From: qdog	Read Replies (1) \| Respond to of 11888

To tell you the truth, I was on a overseas project that they were producing as much water as oil. The funny thing was in the process of finding that oil, they discover the aquifier was quite large and sweet. That time oil was trading between $17-19, so everyone would joke cap the oil wells and produce the water. Significants of breaking $17; actually the significant level was 18. Profits, profits, profits. Cash flow, cash flow, cash flow. All the plans for exploration was based on above $18 and in some cases higher. It was also on the belief of 18-22 trading range. Well, now the belief is that oil may head for $15. That will impact all future exploration projects and alter spending plans. Are the commodity traders at the Merc correct? They weren't correct in driving the price up to $25 and the oil companies said as much. That was done on the heels of refineries adopting a new ontime inventory procedure to pare cost. Commodity traders used it to worry about dislocation of supply and inability to meet demand for refined product. Didn't happen, so I guess now they are sniffing a new tune and it's known as"glut". Yes the facts are facts, but demand is not outpacing production. Saudi's turn the spigot on and Iraq is tied to a production based on dollar amounts and not quanity of oil. At $17, Iraq is producing far more oil than at $22. The rest of OPEC is cheating more than ever and Non-OPEC production is way up. So they are rationalizing at the Merc. Yet and all; you got analyst lining up touting oil and services in the past few weeks. Hmmmm. Someone is wrong. Naturally, if the underlying commodity continues to remain weak for a period of a quarter, then you will see oil stocks drop, then drillers and services. If you are going to play oil stocks, then you have to keep an eye on the underlying prices of the commodities.