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

To: Broken_Clock who wrote (26441)	7/24/1998 5:37:00 PM
From: marc chatman	Read Replies (2) \| Respond to of 95453

PK, I have no ability to predict the price of oil, but nothing would surprise me more than what has already happened. I expected a technical move up at some point (about a week and a half ago, actually), but that didn't happen. A complete technical breakdown is not too common in this bull market, but that is what we have. I believe you are right that OPEC is not about to turn oil prices around. Game theory -- they can't hold it together. But say for the sake of argument there is a war. Yes, oil prices go up. Will that be enough to turn the sector? I don't think so. First, a war would crush the broad market. I've said before that this sector won't buck the market trend. Second, although some would argue against this point, I believe that oil company exploration budgets are driven by revenues, which in turn is based on both price and volume. Without a pickup in demand, there is no volume. Without a pickup in Asia, there is no pickup in demand. Believe me when I say that Asia is a long way off. Even if the Asian markets recover, it will take longer for things to filter down to the people who need to clog those roads with their cars. All of that, I understand. What bothers me is the way companies such as VRC and FGII (and to some extent RIG) have gotten crushed. But now I see (too late) the market forces which have taken those companies down with the rest.