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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Arktic who wrote (5569)	11/12/1998 6:01:00 PM
From: Kerm Yerman	Read Replies (2) \| Respond to of 24925

Paul-Okey-All / Oil Crisis & Iraq In the U.S. today, all the major oil companies scored big gains. The same occurred in Europe this morning. Shares of the oil's are reacting to the Iraq situation. I want to mention another view I have on the markets and oil companies. If one is a long term investor, DO NOT JUMP into the markets for purchase of shares in "dominant oil" producers due to the existing market environment during this Iraq situation. This would include the U.S. majors, U.S. large independents, Canadian integrateds, Canadian senior and intermediate sized producers. It is my belief that shares in these type companies will fall back from whatever gains they make during the period of this crisis - however long it is. I further believe we will again see share prices falling close to the previous lows we witnessed some weeks ago. At this time, there will be many companies whose shares will offer fantastic value. My reasoning is this. We are still in a another crisis that goes beyond Iraq. That crisis amounts to supply and demand and where we are at - in world economics. Everyday over the past week, a major oil concern is announcing cutbacks in 1999 spending due to the low oil pricing scenario. The EIA report amounting to flat oil pricing throughout 1999 has been quite damaging. Developing countries are still to be tested for reviving their economies - particularly in Asia. All the other industry negatives are still overhanging the market. Last, there are the general market conditions which I believe will work against any investing over the near term. As example, the DOW has formed a double top and I don't think we will break through it. Remember the story line before the supposedly correction we just went through - it amounted to "shares in companies have gotten beyond themselves and a correction was needed." Well, here we are a couple of months later and the correction was wiped out as if it never occurred. The scary part is that the same fundamentals used in declaring an overbought market before the correction - has worsened. As an alternative, many are saying investment should be directed at companies leveraged towards natural gas. That's true - if one is comparing crude oil to natural gas. However, one must go beyond that point of criteria. In my opinion, natural gas company shares have also seen their run and further upside is limited. In other words, shares in these companies are pretty close to being fully valued at this time. As a group, natural gas operators have seen their shares appreciate quite a bit since reaching their lows just weeks ago. In regards to the service sector, I am staying away from investment in these companies - especially if U.S. based. Not a great investing scene, is it? A lot of black clouds are overhanging the industry. What we have now is a crack in the clouds and the sun is beginning to shine through. However, it is only temporary and the past storm will continue on. I'm holding shares in my favorites and will hold out to buy when the sunlight occurs in order for me to see a direction.