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

To: Platter who wrote (36981)	2/7/1999 11:54:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

Is the ''Rubber Band'' effect inevitable in Crude Prices ? add Y2K to this... Keep in mind - these production shutdowns are NOT as yet showing up in supply statistics; but they will soon ... * 16,147 crude oil producing wells (23.7 percent) were reported shut-in by survey respondents. * 8,226 natural gas producing wells (19.1 percent) were reported shut-in by survey respondents. * Reported production lost for crude oil was 7.2 million barrels (18,000 bpd) and 13.1 Bcf of natural gas. << ''The cumulative loss of 41,000 jobs in the oil and natural gas industry and the shut-down of more than 136,000 oil wells and 57,000 natural gas wells since oil prices crashed in November of 1997, should send shock waves through the halls of the Congress and the Clinton Administration,'' declared Independent Petroleum Association of America (IPAA) President Gil Thurm. ''America's oil and natural gas production base is eroding. And if action is not taken immediately, the Y2K computer problem predicted in 2000 will look like a stroll in the park compared to what America will face without a functioning domestic oil and gas industry.''>> biz.yahoo.com I don't think we'll necessarilly see ''lines at the pump'' again; but we may not be seeing any sub $1 gasoline in the near future either imho. Add any production/refining/transportation problems related to Y2K - (why would the Oil business be any different from other industries ?) to what appears to be building into a ''stressed'' system and any supply disruptions could well lead to dramatic price spikes.Only time will tell... Once again; the cure for low crude prices - is low crude prices; but these dramatic swings, also appear to guarantee dramatic swings in the other direction. Does it seem odd to anyone else; that it appears Sec. Bill Richardsons trip to Saudi Arabia seems more oriented to gain an entre for International Oil Co's.(no longer ''American'' Oil Co's - don't lose the correct perspective here ) than it is to address crude prices, or over supply ? Is the Clinton administration willing to sell out the true "American'' Oil Industry and its thousands of workers; not to mention the Strategic importance to our Security and Economy, in return for the mega-buck pac money of INTERNATIONAL big Oil ? The remaining OPEC producers may be seeing the seeds sown from an anti-Saudi/American backlash - more Middle East strife? Irrational - panic reactions from producers if they sense Saudi is playing the market share game ? - embargo anyone ? If positive progress is not made and made soon; history has also taught us that volatile political/military solutions will come into play concerning the Middle East . These countries will not be pushed to a financial collapse, while Saudi courts Intnl Oil; certainly not with the rise of anti-American fundamentalism. The situation is reaching a boiling point and it will not continue ''as is'' for long. It will be curious to see what Chavez's role will be. One thing is guaranteed; we will not be ''wondering'' what is going to happen in the coming months - we will know soon ... No one will be able to keep the ''lid'' on this much longer. PS: my personal take on this & trading theory: I think that the Inside Wall Street major players all ready have received a ''wink'' from Greenspan & Co. The next step will be to ''gently'' - lead the Market to a soft landing correction to 7800 - 8250 ish as the Fed will have to raise rates to head off the inflation monster they knew they were creating in addressing the Global Liquidity Crisis. The major players will slowly, but methodically withdraw cash from the market, well in advance of any Fed move on rates, allowing a Fed move to not ''crash'' the markets. The flow of smart money into copper, aluminum, paper and Oil this past week was a tip of the hand held by Wall Street. They will not ''tout'' this move, but watch commodities start moving well in advance of a change in Fed policy. Being ''Early to this Party'' - will indeed be most profitable. Personally; I'm virtually 90-100% ''in'' right here; I plan to use margin and profits to short - on a momemteum basis some over the mania-priced high flyers that will correct dramatically in this coming Cash rotation by Smart Money. It's starting all ready and it will happen. It remains to be seen, if the ''Smart'' money will exit in an orderly fashion, or if they will get greedy and rush for the exits - but count on one thing; they ARE heading for the exits; and they do NOT plan on notifying the public of their intentions... Maybe 'ole LT will ''finally'' get the Gold thing right <VBG> !