"Tman" x@x wrote in message
. ..
It's supply and demand. Specifically, the short-run (in) elasticity of
supply and demand. I think the long-run elasticity of both will
surprise most everybody -- meaning that oil prices are going to go down
way more than most expect. In my opinion, this will happen over t+2 to
t+5 years from now. But that's just my opinion.
We are in the minority, but I also see one last 80's style worldwide oil glut
in our future. Unfortunately, the market will overreact to that condition and
quickly put us right back where we are today (or worse). The wise investor will
buy energy stocks just when things look the bleakest.
There are just too many factors happening simultaneously for fuel prices to
continue their upward movement. 1) At least in the American market, gasoline
consumption is down, and the market for gas guzzlers has evaporated. Just look
at any American car lot and note what is now on the front row compared to what
was there 18 months ago. Further, worldwide recession is moderating the growth
in the world's demand for energy. 2) Given current prices, energy companies
are doing all they can do to bring product to the market, including uncapping
old wells that were previously unprofitable, and including whole new supplies
such as the Canadian oil sands that should start coming online over the next two
years. 3) As soon as the market psychology turns around (may have already
happened) investors will flock to the latest "big thing" leaving oil futures and
oil stocks to fall until they become the biggest bargain in decades. Then the
cycle will repeat.
--
Vaughn
Nothing personal, but if you are posting through Google Groups I may not receive
your message. Google refuses to control the flood of spam messages originating
in their system, so on any given day I may or may not have Google blocked. Try
a real NNTP server & news reader program and you will never go back. All you
need is access to an NNTP server (AKA "news server") and a news reader program.
You probably already have a news reader program in your computer (Hint: Outlook
Express). Assuming that your Usenet needs are modest, use
http://news.aioe.org/ for free and/or
http://www.teranews.com/ for a one-time
$3.95 setup fee.
Will poofread for food.