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

To: Thomas J Pittman who wrote (30439)	10/7/1998 9:41:00 AM
From: Captain James T. Kirk	Read Replies (1) \| Respond to of 95453

Updated Wed Oct 7 09:28 ET NYMEX Oil Pre-opg: Seen lower on mixed crude stock reports OPENING CALL: Crude oil futures: Down 10-15 cents per barrel Heating oil: Down 50-75 points per gallon Gasoline: Down 50-75 points per gallon By Peter Rosenthal, Bridge News New York--Oct 7--NYMEX energy futures are expected to move lower today following divergent reports on crude stockpiles from the American Petroleum Institute and the US Department of Energy. While the API data showed a smaller-than-expected drawdown, the DOE reported an increase in crude stocks last week. * * * The DOE reported a 2.7-million barrel rise in crude stockpiles, while the API data showed a draw of 3.94 million barrels. Expectations had been for a significant decrease in inventories due to Hurricane Georges affect on crude imports and production in the US Gulf of Mexico early last week. Gasoline stockpiles fell 1.82 million barrels according to API, while the DOE data showed a more modest 400,000-barrel-decrease in stocks. The number many participants were focussing on this morning was the 7.5-percentage-point drop in US refinery utilization rates, and a 12.3- percentage-point in runs on the East Coast. While a decrease had been expected in the Gulf Coast because of flooding associated with the hurricane, the East Coast figures were surprising. It has left brokers uncertain of how trading will go today, a broker said. "We've never seen refiner (numbers like these)" a broker said. "It's a crap shoot. What do the people in the pits think?" Overall, because a sharp drawdown in crude and gasoline stockpiles had been anticipated, the market should test key support levels today. Nov crude has initial support at $15.11, then $14.97-$15.00. "Buyers can fairly comfortably sit back and say I have a better opportunity to buy (later)," a broker said, an indication that the market will be weak. Other brokers have shrugged off the inventory reports this week altogether because the hurricane was so dominant for 3-4 days. "The numbers are kind of false all together," a broker said. NYMEX Nov crude (CLX8) ended the overnight Access session down 9c at $15.41. Nov heating oil (HOX8) ended down 32 points at 42.05c, while Nov gasoline (HUX8) ended down 32 points at 47.05c. IPE Nov Brent crude (OILX8) last was down 10c at $14.02. UPCOMING: --NYMEX Nov crude options expire Oct 15; Nov crude futures expire Oct 20. Nov product options expire Oct 27; while Nov product futures go off the board Oct 30. --Iraq Deputy Prime Minister Tariq Aziz is to meet again with UN Secretary General Kofi Annan today.

To: Thomas J Pittman who wrote (30439)	10/7/1998 9:43:00 AM
From: jeffbas	Respond to of 95453

I tell you there isn't a good way. I was heavily invested in the sector in 1980-81, and it turned out the downside risk in all the smaller ones was very close to zero. I haven't invested since although I am starting to follow now. If we are headed for a worldwide recession and continued pumping of oil just to pay bills, I would guess the smaller companies may drop another 50% and the larger ones 25%. My recent investment in the tractor company, New Holland (NH) may be instructive. I am a contrarian investor and saw that industry as interesting long term. But I did not buy until that $6 billion sales company had dropped from 32 to under 10, with a p/e of 4, at book value, where the yield was over 5.5% and 2/3 owner Fiat had announced a buyback of 1/2 of the public stock. I would be looking for similar protection here as an investor (not a speculator), and see no reason why that kind of valuation could not be seen in this sector.