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

To: upanddown who wrote (17926)	4/3/1998 2:38:00 PM
From: Chuzzlewit	Read Replies (3) \| Respond to of 95453

Maybe we're looking at the "coupling" issue incorrectly. Because they seemed to be correlated in the last few months does not necessarily mean that they are correlated -- Kind of like hem lines and the Dow. Coincidence. Baird, Big Dog, Luc and others have argued very convincingly that there is little connection between the price of oil and the day rates for rigs. The only connection seems to be the size of the exploration budgets. So let's assume the market is just as smart as we are and has also figured this out. What do we have left? Perhaps what investors fear is the overbuilding scenario, where the sector is incapable of showing restraint. There is an analyst comment posted on the ESV thread (sorry, I don't have the link handy) forecasting a peak in day rates in 1999, sliding down from there. If so, we will probably be looking at a long, steady ascent in the sector as those fears are allayed. Regards, Paul