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

To: Broken_Clock who wrote (44508)	5/11/1999 4:42:00 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

I have discovered that the most reliable indicator of where prices will go is Doomberg sentiment. They predicted the drop only 1 day off by posting bullish articles. Best contrarian indicator I have ever seen.

To: Broken_Clock who wrote (44508)	5/11/1999 11:41:00 PM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Papaya King;...downside targets Tough call here. I think the technical supports over dramatize the downside here due to the spike we just had. OSX 65ish would seem to be a level that would receive good buying support from just the way the tape ''feels'' here. I think we may be in for a period of a slow bleed down to 65 versus a dramatic selloff. I think we move down here, more from a lack of buyers here at OSX 75-80 than a strong level of selling. Also many feel that $18 crude is fully priced in here, in relationship to the fact that we are still 6-9+ months away from the drillers/service companies getting any real earnings benefit from higher rig utilization & dayrates. The timeframe to recovery seems to be tempering the enthusiam of Crude Prices imho. If we had 135 rigs working in the GOM and crude was $18 - we would be moving through OSX 85ish on a march to 90-100. It's the great news of $18 Oil, tempered against the somewhat disappointing news of the still 6-9 month timeframe untill we actually see virtually any benefit of higher Oil Prices in OSX company fundamentals.That is leading to a lack of buyers here to take us higher, and even to merely support us here. I'll be watching the Rig Count as much as Oil Prices here. I also will not be so concerned with the week - to week API/EIA reports, as I am with the march down to under 325 M boe in storage. With 135 rigs at work in the GOM and a trend to 150 & a trend moving close to sub 325 M boe in storage - nothing will stop the OSX at that point; that will be load the boat & hold time imho - a little margin juice to boot ! Hopefully we see some nice contracts from the service/mfg companies. Positioning oneself here correctly in the chain of recovery may be very important. Will companies like GLBL & HOFF see actual fundamental improvement quicker via shallow water Nat Gas activity/pipeline work versus say HLX, FGI, GIFI, UFAB will in the Rig Building & Major Fab sector ? Which sectors have to have the money spent on them in initial recovery stages and which can the Oil Majors & Independants postpone spending on ? You might have to do seismic work if you want to drill a major onshore, or offshore prospect, but you might not need to contract to build a new deepwater drillship ? You may need to lay some pipelines and do some subsea tie in work (HOFF GLBL CDIS CXIPY SCSWF OII) versus ordering new deck modules, or upgrading major equipment components.... for an answer - just look at where CDIS & SEI are priced... Could be some easy $1-2 short plays in just riding the momenteum down. I am hesitant to hold overnight, or commit to a major retracement. Puts - I'll leave to you option guys; I'd rather catch a buck, or two on the downside in an occassional mo-mo/jump on the bandwagon daytrade and sit & wait to buy cheap on the longside, than to institute a major overall short position. However, it could be a nice 10-15 point run for shorts from 77-80 to 65-68. We are in a tough area to make a strong call on where we go; because that is based on unknowns. If everything stays the same - as far as crude prices, rig utilization, dayrates; and from all reports this isn't changing for the positive anytime real soon; then it's a safe bet to wait to buy cheaper, or to do a little shorting here. I do NOT see any case for a return to old lows of OSX 45-48, or even close. Oil would have to crash to sub $14-15 and that would take a total collapse of OPEC and rampant cheating... possible, but probable ? I do see the ''Street'' trying to ''spin & shakeout'' here imho. Even if OPEC sees some cheating (Quatar, Venezeula ?) there is still a strong mathematical case for what even 50% compliance to these new cuts would do over time... The cheating will lead to an over-reaction hype, and could lead to a panic of profit taking. The June reporting from OPEC will be interesting. There will be a virtual news vacumn untill then.... Also, given present dayrates, rig utilization, current backlogs, the lack of new equipment orders and service projects - I don't see how we move substantially higher here nearterm; unless something causes a new move up in crude to say $20. I don't see what would cause another spike in crude here, given the lack of short positions in any volume in the pits and the probability of profit taking here... not impossible, but not probable... so now it looks as if we enter the ''waffle zone''...not much major news to take us substantially higher, or substantially lower here; unless we see some major surprise... Time to be a stockpicker and to be in companies that are benefiting fundamentally from the present state of crude & gas prices (E&P's); or to be leveraged to the early stage recovery companies... A correction here seems necessary to build a base for a run from OSX 65 to 100 imho. I'll take a little correction in order to build the base for the next leg. A 5 % blow off day and one more day like today - and guess what ? - we're there....OSX 65-68 I know I'll be taking ''some'' high flying E&P profits and rotating back some money back into RIG at $26ish & under, FLC in the $8 -9 & lower range, PGO $15ish, and would love to grab my old fav' CAM back at a tick under $30. CAM SII WFT outran me earlier; won't let it happen again though...