Forum Archive Index - September 2000

[Chris <cd@ak.planet.gen.nz>]

FEG is showing weakness on the back of just announced increased OPEC 
output of 800,000 barrels daily.  Now I make that worth about US$26 
million a day @ $33 brl.  I am no oil expert but from my layman's point 
of view it really seems a negligible sum and an amount that will be 
quickly absorbed.

Commentators appear to be fixated with the price and output but is not 
the lift in the oil price a mere reflection of a bubbling US and general 
world economy.  The massive lift in industrial output seen in the last 
year and it's flow through effect is demanding more energy.  Demand up, 
price up.  Simple. 

With  economic growth forecasts remaining reasonably strong, a cold 
winter forecast for the northern winter and ongoing refining capacity 
problems in Europe and US I see Brent staying between $31 and $36.  This 
bodes well for FEG, Capstone and buyout aside.

Tell me my early education maths is wrong, maybe Capstone dropped 10% 
overnight, or is FEG worth a look in the 860s range?

Regards

Chris       

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