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

To: JZGalt who wrote (27458)	8/10/1998 6:31:00 PM
From: VLAD	Read Replies (2) \| Respond to of 95453

If everything is so terribly bleak, then where is that $8.00 oil we were promised? Seems to me that oil is stuck in a 13 to 14.50 trading range and does not want to really go out of this range. IMO many of the drilling stocks traded to 52 week lows because of the assumption that oil would go into single digits so I see no reason for these stocks to drop to new lows but rather base at current levels as long as oil does not drop below June's lows. If anyone can answer: What exactly was the source of information that OPEC nations were significantly cheating on their production quotas? I know very little about the methodology of tracking this data but it would seem to me that the only reliable source would be the oil companies themselves that are purchasing and exporting the oil that the OPEC nations are selling. CNBC mentioned that OPEC may have to meet sooner than November to somehow get it's members to comply with original agreements and probably call for more cuts. Is this scenario realistic and probable or are these guys going to continue to cut their own throats for each nation's personal gain? Are production quotas not being met because of significant cheating or as countries such as Venuzeula have indicated, they have prior contract commitments to fulfill up through mid August before they can be in full compliance. Seems to me that I am not so sure that there is really a lot of cheating going on vs these nations fulfilling prior contracts. Any thoughts on this? Is the media full of themselves or is OPEC really failing to honor its agreements amongst member nations? On another note, August is a big month for gasoline consumption as many are vacationing and traveling before the summer ends and kids have to return to school. With this in mind and the fact that many refineries are going to shut down for maintenance, is it probable that the gasoline inventories will be significantly consumed in the month of August thus drawing from the crude storage to replenish these supplies come September? And it seems that right after this time period we will have a return to cold weather which will increase the price of natural gas which should in fact keep the drillers in the Gulf occupied in Q4 and keep day rates relatively stable. Natural gas is the method used for home heating in most urbanized areas in the North and a La Nina winter certainly can drive the natural gas prices higher and thus keep those drillers in the gulf occupied drilling for gas. Am I incorrect in this line of reasoning or is crude oil pricing more relevant than day rates when it comes to drilling companies with significant interests in the gulf?