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

To: Czechsinthemail who wrote (12222)	2/20/1998 1:58:00 AM
From: Jess Beltz	Read Replies (1) \| Respond to of 95453

Baird, Thean or PK (or anyone): The multi-million dollar question: What is anyone using as a leading indicator with predictive power for the direction of changes (and their magnitude, if possible) in the price of crude? My only thought at the current moment, and I don't have a set of indicators that I watch (the question above) is that in large part the current glut is being attributed to the big economic downturn in the economies of Asia. Look for the crisis there to end when (1) there is some resolution to the crisis in Indonesia, and (2) Japan does something meaningful about (a) its banks and (b) the economy there. I would say right now, the Indonesian crisis should blow over within the next 5-6 weeks (as far as more bad news coming out is concerned.) Japan may take longer. I look for Asian economies (other than Japan) to begin to rebound sometime around the start of the 3rd calendar quarter, and the last of the bad news (that's been hammering the market) to play out in the 2nd quarter (April-June.) Incidentally, I believe the start of the third calendar quarter is also in the first part of the annual US domestic demand spike caused by Summer vacation travel. The f-factors in the equation are the current situation in the mid-east and any attempt by OPEC to impose quotas. I don't know about the latter, but my feeling is that the former will have only a momentary effect UNLESS Clinton does some half-assed thing that keeps tensions heightened for months. It seems that the US is much more interested in a quick-in, quick-out surgical kind of strike, so I don't think that will mean much, if it happens at all. (Undoubtedly others on the thread have voiced similar concerns.) Unfortunately, I also don't know how much real power OPEC has, but I think its power has waned a lot in the last 20 years. In summary, I see no let up in the glut for the moment, but do see it bottoming between April and June (I might start nibbling around tax-time, Apr. 15th.) I believe I will try to be fully invested in drillers before the $OSX starts to turn, which I look for about the time school lets out for the Summer. Hows that for some seat-of-the-pants economic analysis/bullshit? Criticize freely! jess