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

To: Crimson Ghost who wrote (40430)	3/19/1999 6:21:00 PM
From: Wallace Rivers	Respond to of 95453

Thanks, George!

To: Crimson Ghost who wrote (40430)	3/19/1999 8:58:00 PM
From: Greg Jung	Read Replies (2) \| Respond to of 95453

Open question: someone please explain why Oil service industry should be responsive to a supply-constrained oil price increase. It seems to me, there is to be less production and lower exploration. Unless day rates are tied to the oil price, I don't see why economics of the service portion should change; there are still the same people competing to service a smaller supply. Only when demand increases and rigs are more heavily subscribed does it make sense that oil service stocks should make money again. So those stocks with oil to sell should continue improvement while services should stall out, awaiting recovery of the asian economies (which may be forstalled by higher oil prices). I am presuming I am wrong and that day rates already are rising, otherwise the stock price rises in SLB, HAL, etc. are crazy. I would like to know why the rates are so responsive; my guess would be that they should lag, and improve only after substantial economic strength. Greg