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Gold/Mining/Energy : Harken Energy Corporation (HEC) -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (3485)	8/29/1998 10:06:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 5504

Razor,Asia was serving as the "growth engine" for the world increasing demand for crude by at least twice the worldwide increase in demand. The crisis there not only killed that growth but actually got their demand below that of last year, thus the glut. Russia may have a limitation on how much more oil they can pump, but their internal demand could go down by a good 10% to 15%, rediverting the excesses to world markets. Having said that, I do not think that the Asian malaise will be with us for years. Japan must straighten out their economy, and while they may wait until the last second to save face, I do not think that they will commit economic suicide. Thus by this time next year, visibility of increased demand should be here, and crude prices could stabilize and even increase. One thing we should all note, however, the CRB has broken few weeks back a major support level at 208, and justlast week it went trough 200 like through butter, a multi year low. That means that the malaise in Asia, Venezuela and Latin America has major deflationary pressures on commodities' prices, a fast recovery in commodity prices is probably not in the cards for some many months (a year?) to come. As for HEC, from a technical point of view, it has put a very good show at the $3 level, not making a new low. While that does not turn me bullish on the stock (we still have a possible "October Massacre" ahead of us), it shows some support. Zeev