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

To: upanddown who wrote (23253)	6/2/1998 8:21:00 AM
From: marc chatman	Read Replies (1) \| Respond to of 95453

The general market looks to be up a bit at the open (futures up). I guess that's bad news for the oil service sector as the short sellers will need some place to play today. Oh, and July Brent is down .04. A couple of people here have suggested that the OSX may be on its way to retest the low of around 88. I'm wondering whether that is conservative enough. When the market hit its low, it had come down from a high of 141, so the decline was about 38%. If we get the same decline from our high of 122, then the target would be about 76. In all seriousness, though, I don't think I've ever seen a group so fundamentally strong as the service companies and equipment manufacturers get hit so hard without some equivalent drop in the overall market. The sector ran up nearly 39% from the lows (that actually beat the DJIA and S&P, right?), and we've now retraced about 2/3 of that. OK, now I'm prepared for another lousy day. Maybe the weather will hold, and I can get in some golf -- sure beats watching the OSX.

To: upanddown who wrote (23253)	6/2/1998 10:44:00 AM
From: Gator II	Read Replies (3) \| Respond to of 95453

John...OPEC Oil Ministers may be dumb like foxes. While they may be "challenged by laws of supply and demand," they also may be more concerned about losing World "share-of-market" than they are about current oil prices. They may also be willing to default on debt (naw, never happen--lenders will just renegotiate terms). They have to know that they (and their cheap oil) are less important TODAY with cheaper oil available for the drilling due to seismic, horizontal drilling, and other technological breakthroughs in the oil patch, than just a very few years ago. They may simply be afraid of losing what they perceive (accurately in the past) to be control. Last year, before OPEC raised their quota's 10%, we had more projects planned or underway (off-shore, South America, East Coast of Africa, North Sea, Vietnam, RUSSIA, etc., etc.) than the oil service sector could shake a rig at. Now, land drilling, worldwide, is in the doldrums; shallow offshore is slowing, Russia is continuing to collapse, boats are idle, land rigs are being stacked, etc. Bottom line, I have this nagging feeling that Saudi Arabia et. al, is perfectly willing to maintain this "blue light special" on crude until world-wide drilling programs at the level we saw last year, simply go away and they are assured they will stay away for a while. In other words, I am not holding my breath for more than OPEC jaw boning crude prices later this month but am hoping I am wrong! Gator II