Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: upanddown who wrote (37625)	2/16/1999 9:44:00 PM
From: John Carpenter	Read Replies (1) \| Respond to of 95453

John, your posts made some very good points. Perhaps by being so focused on the timing of my reentry into the sector, I'm missing the bigger picture- namely that oil will see better days. Since timing the reentry point is so difficult and probably impossible for most of us(certainly myself), it may be prudent to begin tiptoeing into the sector. Mark noted the increasingly bearish sentiment on this thread also. From a risk/return perspective, we're probably closer to the bottom than the top. The bad news about this sector is very widely publicized. Perhaps when it seems, like today, that the bad news is never fully reflected in the stock prices, we're getting close. By being so obseessed with the exact bottom, I may be missing the forest for the trees. I just hope we all don't wind up like gold stock investors where there truly is no hope! No, gold is down and staying down for many reasons of its own, many not directly related to oil. Here's to tiptoeing.

To: upanddown who wrote (37625)	2/17/1999 7:39:00 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 95453

OPEC agreement crucial, banker says Denver Post A constructive OPEC meeting in March is key to reversing the crash in crude oil prices, according to investment banker Tom Petrie. "If OPEC doesn't get its act together, I think things will deteriorate so much further that it will necessitate some real policy response from the U.S.," Petrie told a sold-out industry luncheon last week. Failure to reach an accord in March will sow the seeds for a successful meeting in the fall. In the meantime, the industry will suffer painful second and third quarters, according to the principal with Petrie Parkman & Co., Houston and Denver. Could the ramifications of a failed March meeting jeopardize U.S. claims of being a great economic power? "I could see Bill Clinton adding the oil industry to his list of welfare recipients with some federal programs advocated by - of all people - the president and vice president Al Gore," said Petrie. "The stakes are huge. The demise of King Hussein of Jordan, along with other global factors, puts us in a position of recognizing that low oil prices are too much of a good thing, despite their positive effects on the overall economy. It's a tax credit you didn't have to sign off on for Congress, but it begins to feed on itself and the seeds of anarchy may be sown in Russia - which is already in chaos - and elsewhere.' The banker's outlook for oil prices is not overly optimistic. If OPEC players are ready to play ball with one another (and Petrie suspects they are reaching that point), and if they cut half to three-quarters of a million barrels per day, demand may begin to eat into the oil overhang and usher in a new norm of $10 to $14 per barrel. "I take issue with the notion that we're looking at a foregone conclusion that single-digit oil will be with us for the foreseeable future," he said. "While we can simplistically go back to the Great Depression to compare this crash with the crash at that time, the other alternative or analog is the late '60s and early '70s. We've had a fairly long period where real prices are declining and we are drawing on our cushion of supplies, while in the late '60s we were removing the last vestiges of rationing. "Today, the notion of working off excess is very real - it's there in the North Sea, the North Slope and elsewhere. Combined with today's commodity price conditions, which have hampered production of Canadian and U.S. heavy crude, and pushed out projects in the Gulf of Mexico deep water, it seems that tightening of the supply/demand equation is closer than you might think." While the hardships of the oil industry have taken center stage, Petrie forecast an even grimmer outlook for the next few quarters for natural gas. "We're closer to the bottom in oil than we are in gas," he said. Susan Klann of Denver is a contributing editor of Oil and Gas Investor magazine. Her column about energy appears every other Sunday. Contact her at ssklann@aol.com. (Copyright 1999) _____via IntellX_____ Publication Date: February 14, 1999 Powered by NewsReal's IndustryWatch ...back to top