Energy, Energy Service, Natural Gas &amp; Oil Sectors

Top 28. Mar 17, 1999 6:13 AM

» Gene - Rande

Interesting explanations and a couple of points:

1. Competition - where I buy gas, there are 3 majors within 200 feet of each other - Mobil, Gulf and Sunoco, therefore always some form of a gas war.

2. Price increase / decrease - couldn't agree more with you on that one and have found their explanations offered on why fast up and the slow down quite humorous!

The government intervention is a different topic and always a touchy subject - where you may want to go with it, others don't and vice versa. Our last local banks are merging (Fleet/Bank Boston) and a lot of locals want banks investigated as we have NEVER received lower fees nor interest rates from them as they eliminate the competition! Add to it the disgrace over monopolistic cable TV rates but all this stuff is for another site!

Did you catch Cramer on Squawk Box this AM about buying some oil drillers! Makes me feel good about getting some Transocean but before I get carried away, I remembered his Hedge Fund was up only +2% last year and even my Brinker 50% - 50% Balanced account beat him!

Gene

-- posted by Gene

Top 29. Mar 17, 1999 7:01 AM

» RandeS - Gene,

Gene,

Yeah, read yesterday Cramer was nibbling on oil-related. Just a couple of weeks ago he was poo-pooing the oil rally. His latest thoughts are that if it's real, okay, and if it's not, okay. Typical non-committal.

As for government intervention, I guess I feel as you do. Certainly believe JD's fight against MSFT is a mistake and sets a dangerous precedent. As for SFBA situation, I think my complaint is more centered on what the oil companies have done to force out the independents. As a consumer, the competition between independents and company-owned stations provided the only real promise of reasonable prices. We usually see a Shell across from a Chevron around here and they keep in lockstep with each other as far as prices go. The annihilation of the independents got some press years ago, but nothing ever came of it. Such is life.

-- posted by RandeS

Top 30. Mar 17, 1999 8:04 AM

» RandeS - Kirk,

Kirk,

Too-rapid growth can be a drag, especially when former policies and practices have led to too-little for those who are already in place (eg, not enough gas stations as it is). You know, the Marin-ites really take the "zero-growth" concept to the extreme. Instead of NIMBY (not in my back yard), the clarion call is BANANA (build absolutely nothing anywhere near anything). Might be something to that, as selfish as it may seem.

-- posted by RandeS

Top 31. Mar 17, 1999 7:46 PM

» Hugs - Crude oil going higher?

Sure looks like it has some gas left in it...

Moscow, March 17

Russia's oil minister, Sergei Generalov, told the Federation Council, the upper house of parliament, he would not rule out the possibility that Russia could implement restrictions on crude oil and oil products exports, in line with the March 12 Hague agreement that saw some OPEC ministers and Mexico agree to new output cuts of more than 2 million barrels per day. Russia made a contribution to oil output cuts last year of 63,000 bpd.

Maybe OPEC and non-OPEC together will make a difference yet:
http://cnnfn.com/markets/wires/9903/17/o...

My oil pup is sitting up, and yes, that's legs I see! Hope he learns to walk on the tomorrow. Closed at the high of the day. Up 12.4% since my recent repurchase of some. But, I'll confess. Probably will be selling a little into tomorrow's strength, even if it's not the end of the rally, to "re-adjust" the load. Crude is over $ 15, as we were discussing Rande, and the way things are looking, it may just stick.

-- posted by Hugs

Top 32. Mar 18, 1999 8:46 AM

» RandeS - hugs,

hugs,

$15 oil may well stick. I think everyone can live with that. I'm scratching my head about Russia's ability to curtail anything that brings in hard cash, given that coutry's current state of affairs, however.

-- posted by RandeS

Top 33. Mar 19, 1999 2:42 PM

» Hugs - How high is too high?

At what price does crude oil become:

1. too much (if any) pressure for inflation?
2. too much risk for the American economy?
3. too much risk for struggling Asian economies?
4. Does $ 20 oil really put things "in the tank"?

Here's an article from the U.K.:
http://news.bbc.co.uk/hi/english/busines...

-- posted by Hugs

Top 34. Mar 19, 1999 4:56 PM

» RandeS - hugs,

hugs,

I don't think $20 oil is going to break the US consumer. I have to wonder about the rest of the world, especially the most hard-hit areas of the Pacific Rim and Latin America who have no domestic oil supplies. Doesn't matter anyway -- the price will eventually settle at equilibrium, based on supply and demand, no matter what OPEC and Big Oil manage to concoct in the short run.

-- posted by RandeS

Top 35. Mar 19, 1999 4:58 PM

» DennisL - Article from the U.K.

Hugs, I think that article from the U.K. is deadly accurate. The OPEC oil bastards have the whole industrialized world by the balls. If they get together to cut back on production and drastically raise oil prices, it's going to be the early 1970s all over again--even worse this time because the world's reliance on OPEC oil has vastly increased during the last 25 years and cheap oil has lulled all of us into a state of complacency.

If there's another oil price shock like the early 1970s, we can kiss the bull market good-bye. The precipitous decline in stock prices will occur so quickly, you'll miss it if you blink your eyes just once.

Time to go shopping for one of those 60 miles per gallon Geo Metros?

-- posted by DennisL

Top 36. Mar 20, 1999 11:22 AM

» Hugs - A $ 64 dollar question...and a few more

Is crude oil's rising price threatening the current bull market because of:

1. Higher production cost=lower earnings=lower prices? (soft landing, market "correction")
or
2. Threat of inflation=fed rate hike=lower valuations? (run for the doors, look out below)

Part 2:

It's evidently debatable whether $ 15 oil would precipitate either of the above, as cost increases are inevitably pasted through to the consumer (who may not even be phased by them=no reduction in corporate profits)

Accepting that $ 15 is here to stay, where's the debat lead to at $ 20 oil? Forget going any higher. Does OPEC have no "brains" to foresee that a "knife" to the U.S. economy would result in a quick gain now but result in a "stake" in their own heart. (Isn't that the lesson from the 70's?) It appears they mean business. But doesn't $ 30 or $ 40 oil assigns to them too low a mentality?

Historically, haven't gold and oil price movements been key indicators for inflation? Haven't they always moved in tandom? Does that mandate this will forever be true? Or...is this a "new world economic order" where the "rules" are subject to "change without notice."? Witness the investor sentiment toward internet stocks, which are sanctified from "conventional theory." What if oil goes up, but gold dosen't? Is it possible, or even probable? Would one be a "false" indicator and the other a "true"? Which would rule?

I'd better quit. I'm a regular question box. Surely some of you smarter folk have some answers for me out there...

Thanks for your help,

-- posted by Hugs