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

To: Elmer who wrote (32199)	11/28/1998 2:59:00 PM
From: Big Dog	Read Replies (2) \| Respond to of 95453

elmer, you are right. But I don't agree that there "is no way we will be in the dumps for another 11 years". There is way. I am telling you that in 1986 in the darkest hour, a person could have made a case for a renewed strong market. The case would have made perfect logical sense -- and many people made that case. But it didn't happen. The only thing that created the boom of 1997 was high oil prices coupled with deepwater technology. Without high oil prices there would not be deepwater activity to the extent is exists today. Sure things are different today -- on many fronts. But the fact still remains that only higher oil prices will spur more drilling which generates more service work, etc. Is there any reason to expect prices to be higher a year from now than a week from now? Most will say yes, but that is only because a year seems like a long time and most people are optimistic and think events will change for the better over time. Just because they think it don't make it so. As long as there is more oil produced, or capable of being produced, on a daily basis than there is demand for oil, ie. a surplus, the price of oil will not be dependent on traditional laws of supply and demand. The price will be subject to extra-market forces of which NO person can accurately predict. To have an opinion on the price of oil service sector stocks should mean that you have an opinion on the price of oil over the next months and years. The top management in the business doesn't even get this preciction right...so how can we mere mortals? There are lots of forces at work which a person can use to compile a forceful argument for higher oil and rig prices. And the argument may be right. But it can just as easily be wrong...history says it's wrong (except for brief periods). Trade 'em, don't hold 'em. big loosbrock.com

To: Elmer who wrote (32199)	11/28/1998 3:03:00 PM
From: marc chatman	Read Replies (1) \| Respond to of 95453

Elmer, one point to take into account: You say "#2 is just the amount of rigs available." With the great new technology for finding and accessing oil (technology which wasn't available in the 80's) and for maximizing the output from each well drilled, I would assume a much smaller number of rigs today can more than take the place of the rigs available more than a decade ago. This is just an assumption on my part, and there are probably some people here who can confirm or dispute my theory. But it seems logical based on my limited knowledge of the business.