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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 (43729)	5/2/1999 3:17:00 PM
From: Brent Hogenson	Respond to of 95453

Boats specifically (TDW and TMAR) I caught TDW's conference call and William O'Malley (TDW's CEO) said that about 40 new builds are going to hit the GOM and 30 new builds are going into the North Sea. These areas represent over 80% of TMAR's revenues. On TMAR's conference call the CFO said that he expects day rates in the North Sea to remain flat. (note I have noticed that TMAR's management has always been overly optimistic) I don't see how this could be possible if what O'Malley says is true. The North Sea is the only thing holding TMAR together right now. So if you believe O'Malley, is it time to flip out of TMAR? (I am very long and nervous) I am thinking about switching to FLC. Comments anyone?

To: Crimson Ghost who wrote (43729)	5/2/1999 4:08:00 PM
From: upanddown	Read Replies (3) \| Respond to of 95453

While most pundits attribute the lower price in oil to the drop in commercial demand from a depressed Asia, they are missing the crucial point that, at just $11 a barrel, it reflects the collapse of investment demand for crude. They forget that the biggest factor affecting the price of oil in the 1970s was inflation-hedging speculation (as it was for gold, base metals, other commodity assets). Today, there's no inflation to hedge against. Hence, investors have stayed with financial assets, such as stocks and bonds, and rejected unprofitable commodity assets, such as oil. After 15 years of falling inflation, world markets have completely withdrawn the inflation premium from oil prices. So now oil is priced primarily on the basis of exploration and production costs, which technological advances have significantly reduced to about $7 per barrel for domestic crude (In Saudi Arabia and the North Sea, the cost is only about $4.) Technological improvement in exploration tools and transportation systems will continue to make it easier and cheaper to discover, extract, and distribute oil and its byproducts. All this comes right out of economist Joseph Schumpeter's playbook: Rapid technological innovation breeds more output, with better quality, at lower prices -- forces he called "gales of creative destruction." With the likelihood of new discoveries and production from the Caspian Sea, South America, the China-Pacific region, and elsewhere, oil prices are likely to remain low for years to come. And, though very few economists and investment gurus seem to realize it, that will be a huge boon for the U.S. economy and the stock market. Lawrence Kudlow 12/21/98 So Larry Kudlow was dead wrong then but he is right now ? Larry is a very bright guy (though maybe a little too smooth and oily...like his hair) but like most pundits, all he was saying is that the trend will continue. Even heads of major oil companies were saying the same thing. I prefer to look at long-term trends in oil prices. In the last twenty years, when oil prices change direction, the new trend usually stays in place for a minimum of one year and sometimes up to 3-4 years. oilworld.com I think we saw a major change in direction in the first quarter of 1999. JMO and I hope I didn't libel Larry by dissing his hair. <vbg> John