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

To: Czechsinthemail who wrote (24519)	6/22/1998 2:47:00 PM
From: Lazlo Pierce	Read Replies (3) \| Respond to of 95453

Wow, TA guy on CNBC major bear on oil prices. Says historically oil trails gold by 3 to 6 months, says the bottom is below $10. Hmmmm. Dave

To: Czechsinthemail who wrote (24519)	6/22/1998 3:42:00 PM
From: Chuzzlewit	Respond to of 95453

I think we are going to have to disagree on this one. My thinking leads me to the analogy with general inventory levels in a business. When a business has high levels of inventory (measured in terms of day's sales) it cuts back production. This is not so much a price or profitability issue as a capital deployment issue. As I see it, decreased oil usage means that existing supplies will last a longer period of time. That is what is decreasing the demand for drilling. Just as a business with excess inventory tries to clear its shelves by dropping prices to increase demand, so oil producers drop their prices. Decreasing oil prices is exactly what needs to be done to restore the long-term health of the drillers because it will hopefully clear excess inventory -- and I'm not talking about what's in oil storage tanks -- I'm talking about developed fields. TTFN, CTC