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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: pwrmstr who wrote (7441)	1/10/1998 2:47:00 PM
From: Tulvio Durand	Read Replies (2) \| Respond to of 95453

Back to basics. Comparing oil drillers to semiconductor manufacturers in the '95 semi meltdown has me puzzled. Are there too many drillers now chasing too little business? If yes, then I would agree, and would want to exit this sector promptly. If no, then the MM are being irrational and we should stay the course. Also, are you suggesting that if the price of oil drops below 16 for a few months, that this would diminish oil drillers' business? I think not. My impression is that oil drillers business is tied to oil to be produced (and its price) two to three years in the future. Certainly the Asian question should have beem well settled (and probably forgotten) by then, oil consumption would also be larger (it's never gone down over a two year period or longer, as far as I know), and oil prices will be higher then as well. Thus I see the oil drillers not impacted by spot oil prices other than for temporary sympathetic (emotional) reactions, and with assured reversion to valuations based on underlying fundamentals, ie., reasonable PE ratios. Please correct me if I'm wrong. Tulvio