Why I think oil stocks will rise

**Anton** · 07-23-2006, 03:39 AM

1. Israel and Lebanon conflict is worsening...
2. Iran remains unfazed by threats of UN sanctions..
3. U.S debt crisis...

but the major factor really is number 2.... iran - 2nd largest oil producer, controls shipping lanes in persian gulf.... rise in oil prices would greatly benefit iran... so this uncertain conditon right now is what iran wants...

Just a thought

**MeMing** · 07-23-2006, 10:36 AM

you have a point there sir but i think you have forgotten the most important factor of them all: THERE'S NO MORE OIL?

**Anton** · 07-23-2006, 12:42 PM

That's not entirely true actually... during the late 70's and early 80's the world exprienced the same increase in oil prices

Also, new technology has been developed to go deeper and deeper...
Its just that there is a higher than expected demand for oil, mainly due to China's rapidly expanding economy coupled with the US increased demand for oil from its current vehicle buying trend (think of those hungry SUV's). And because OPEC is already pumping out flat out (with their 1980's era pumping equipmnet). Among the suppliers only Saudi Arabia has enough pumping capacity it can give to the market.

Also, because OPEC has become more agressive in pre-empting any weaking in prices.Before they used to wait for the prices to dip before decreasing their output, now its a totally different story.

The world's major oil consumers remain dependent on the Middle East for their oil. Recent violence in Iraq and Saudi Arabia has again raised fears about an interruption to supplies.

**MeMing** · 07-23-2006, 01:05 PM

so you think oil reserves are not yet depleted in the world?

**dagget** · 07-23-2006, 01:26 PM

as oil prices increase the price of other goods will also increase like basic commodities..........

so even if OPEC gets more for each barrel of oil..... they have to pay more for the things they buy like agricultural produce since not many plants grow in the desert......... so oil is but a curse......

what will happen if there is no more oil in saudi arabia.......... would people still live there

?

**dagget** · 07-23-2006, 01:28 PM

oil stocks will earn big but what will they do with their earnings..... they will have to invest more money to get more oil..... so what they earn will really not mean much because prices of goods and services will also go up.........

right now oil giants are having a hard time looking for oil..... and they face extinction just like the dinosaurs...... what is an oil company if there is no more oil......... They have more money in their pockets but they don't know what to do with all that money.............

**Anton** · 07-23-2006, 02:06 PM

Originally Posted by MeMing

so you think oil reserves are not yet depleted in the world?

If it were depleted wouldn't you think the US or the euro countries would just be sitting there still continuing dependence on oil?

Originally Posted by dagget

as oil prices increase the price of other goods will also increase like basic commodities..........

so even if OPEC gets more for each barrel of oil..... they have to pay more for the things they buy like agricultural produce since not many plants grow in the desert......... so oil is but a curse......

Yes pretty much for the entire world, but for Iran and Saudi and other OPEC countries its a different story.. Well think of how this countries are tax free. Further more the dependency on the world on oil will not disappear in an instant. Have you seen dubai's new oasis in the desert? Or how one Arab parcel service just closed a 3.3billion dollar deal with boeing ( highest currently), its an increase in their buying power. And if oil is a curse why is our government or other countires looking for oil?

It seems like this oil producing countires know what the'r doing with their oil money, well were sending OFW's there arent we? So its just points out they are doing much better than us economy wise.

If there is no more oil, its does not only mean their doom but the world's as well.... No one really knows how much oil is there left, thats why there is uncertainty, only the countries and the major oil players know how much is left. And i don't see them telling anyone in the very near future. As this uncertainty creates a leverage for them.

Pls see BBC related news: http://news.bbc.co.uk/1/hi/business/4672716.stm and here http://news.bbc.co.uk/1/hi/business/4922172.stm

**MeMing** · 07-23-2006, 06:55 PM

but i think logically, oil should be pretty much depleted all over the world. but i also believe that there might still be a chance that there's still another oil reserve that hasn't been found yet so the oil companies might as well spend all their earned money looking for that.

in terms of stocks, if i had the capacity to do so, i would never bet on a dying (in my opinion) technology/resource. i might as well bet on new renewable sources of fuel like hydrogen something.

**Anton** · 07-23-2006, 11:02 PM

Yes, the right term is commodity.... I'm not betting on a depleting commodity, because for im pretty much sure oil stock prices would move back to normal price movement in 3years.

What I'm pointing out is the fact that the volatile condition of the middle east is a great factor on determining oil prices. The Iraqi invasion, the Iranian nuclear program, Israel bombing lebanon, suicide bombers everywhere.... Makes oil stocks jump.

**MeMing** · 07-25-2006, 09:27 PM

hmmm... regarding the violence in the middle east, what's new? i thought bombings and killings in that area is pretty normal so i don't think israel's bombing on those terrorists that are hiding in lebanon will affect the prices of oil stocks. i think the factor that's affecting it right now is basically base on the supply and demand (depleting oil reserves and china's abrupt rise in demand for oil).

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