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I'm liking this pick a lot. If tomorrow is green, it looks to have created a positive divergence from the previous uptrend. I think this has enough gas to push this further. I've set my limit for Monday morning.
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Soros Has Oil Price Fears - Ready For $262-a-Barrel Oil?
When it comes to oil prices, you ain't seen nothing yet.
According to Fortune magazine's Nelson Schwartz, two of the world's most successful investors say oil will be in short supply in the coming months.
One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.
The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England - and won. "I'm very worried about the supply-demand balance, which is very tight," Soros told Fortune. [Editor's note: Find out how oil prices are leading the U.S. toward a recession - and how to protect your investments - Go Here Now.]
"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.
Another emboldened troublemaker is Russian president Vladimir Putin, Soros said, citing Putin's recent decision to briefly shut the supply of natural gas to Ukraine. The only bit of optimism Soros could offer was that the next 12 months would be most dangerous in terms of any price shocks, because beginning in 2007 he predicts new oil supplies will come online.
Hermitage's Browder doesn't yet have the stature of Soros. But his $4 billion Moscow-based Hermitage fund rose 81.5 percent last year and is up a whopping 1,780 percent since its inception a decade ago. A veteran of Salomon Bros. and Boston Consulting Group, the 41-year old Browder has been especially successful because of his contrarian take; for example, he continued to invest in Russia when others fled following the Kremlin's assault on Yukos.
To come up with some likely scenarios in the event of an international crisis, his team performed what's known as a regression analysis, extrapolating the numbers from past oil shocks and then using them to calculate what might happen when the supply from an oil-producing country was cut off in six different situations. The fall of the House of Saud seems the most far-fetched of the six possibilities, and it's the one that generates that $262 a barrel.
More realistic - and therefore more chilling - would be the scenario where Iran declares an oil embargo a la OPEC in 1973, which Browder thinks could cause oil to double to $131 a barrel. Other outcomes include an embargo by Venezuelan strongman Hugo Chavez ($111 a barrel), civil war in Nigeria ($98 a barrel), unrest and violence in Algeria ($79 a barrel) and major attacks on infrastructure by the insurgency in Iraq ($88 a barrel).
Regressions analysis may be mathematical but it's an art, not a science. And some of these scenarios are quite dubious, like Venezuela shutting the spigot.
Energy chiefs at the World Economic Forum in Davos, Switzerland, downplayed the likelihood of a serious oil shortage. In a statement Friday, Shell's CEO Jeroen Van der Veer declared, "There is no reason for pessimism." OPEC Acting Secretary General Mohammed Barkindo said "OPEC will step in at any time there is a shortage in the market." But then no one in the industry, including Van der Veer, foresaw an extended run of $65 oil - or even $55 oil - like we've been having.
It's clear that there is very, very little wiggle room, and that most consumers, including those in the United States, have acceded so far to the new reality of $60 or even $70 oil. And as Soros points out, the White House has its hands full in Iraq and elsewhere. www.newsmax.com
-------------------- All IMHO. Do not rely upon anything I post to base your financial decisions upon.
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1. Panola prospect now has three different groups who have expressed an interest in funding the drilling in the first wells. 2. We now have three wells producing in Tennessee, researching a fourth. 3. April, 17 planned court date for our lawsuit against former management and consultants. Our counsel continues to inform us that the strength of our case gets stronger as the court date approaches. 4. Joint Venture candidates are under review and will accelerate projects. 5. Concord Dome field, which has had over $1.4 million invested by two funding partners, deemed a commercial success, details are pending. 6. CEO has provided the truth to shareholders since the beginning and he owns 50+% of the outstanding shares.
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richie, grandma has given good reasons, but you have to do your own DD and make the decicion on your own. listening to what other people have to say should be a very small part of your decision.
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quote:Originally posted by Kane31: richie, grandma has given good reasons, but you have to do your own DD and make the decicion on your own. listening to what other people have to say should be a very small part of your decision.
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I am in this one and in TNOG. I think they are both going to be winners in 2006. OMOG has their court case coming up April 17th as well.
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-- OMDA Oil and Gas, Inc. (OMOG) , is pleased to announce it has entered into final negotiations with KY-Tenn Oil Inc. (KTO) to participate in a three well drilling program.
KTO has proposed drilling three 2100 ft. wells to test the Chattanooga shale formation. This active field has other potential formations producing in the Monteagle and Fort Payne zones. Upon completing the drilling and the logging of the wells, the primary target will be the Chattanooga Shale. The proposed completion of the shale will include a "sand frac" of the formation. KTO has had good results with this type of "frac" with the Chattanooga shale in an offset well. The geology of the area indicates the shale should be encountered in all three wells.
Concerning the sale of oil and gas, there are companies in place and available to purchase the hydrocarbons. Somerset Refineries is looking to purchase the oil and Citizens Gas Utility District has the gas gathering system in place to purchase the natural gas.
Adam Barnett, Chairman, stated, "OMDA Oil and Gas is extremely excited about this project and we look forward to establishing a long-term relationship with KY-Tenn Oil Inc. Based on KTO's recent 'frac' experience, we have high hopes that these three wells will prove equally successful. With KTO's vast land area of over 41,000 acres, OMDA is eager to explore future working and drilling projects with KTO in Morgan, Scott, and Fentress counties that may prove beneficial to our company." Barnett went on to say, "I look forward to sharing more details about this and recent developments on the Young Oil project in the near future."
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