Thanks - another post I found meaningful <<I just talked to Terry re the postcard message. The most important thing out of the conversation appears to be Geoff the head man at Norwest is joining Strata at his own request. It appears that he recognizes what is about to come in the next six months or so, It also appears that through Norwest since the firm has brokered other deals Shell may be showing some interest. The current train of thought appears to be that the remainder of the Cadotte Lease may hold an amount of oil equal to the previous discovery. Stratta looks to be trying to raise money internally to further explore the remaining portion of Cadotte. At any rate the head guy from Norwest would not be joining Strata unless he saw huge financial opportunities here. >>
A must watch: Matthew Simmons, chairman of the energy investment firm Simmons & Company International. http://www.cnbc.com/id/25640227
Watch their faces as he says oil is actually lower than it should be because of the vast amount of shorting it and the belief that it is going down. And that we are going to keep dropping our inventory. (we have reduced consumption by 1%, but China increased by 1%,, and in next year we are going to lose 4 million barrels from Mexico, as their fields are depleted and producing less and they are going to keep it for themselves).
They first look scared for the future, then start to make faces like he is a crackpot doomsdayer. I agree with much that he has said. I have spent a good bit of time the last week looking at fuel usage. While gas inventories went up this last month - reserves dropped 4-5 million barrels. Until now we have always had excess supply. We are getting very close to equilibrium. China built 50 Coal energy plants in last year. (i.e. demand growth) Russia past Germany for new auto sales. In US for every 1,000 people we have 500 cars. In India it is 6, in China it is 7. What if they just double to 12 and 14 per 1,000 people? We are projected to lose the 4 million barrel from Mexico, and 1,500 a day in India move from bike to car. Wen you have excess capacity/inventory prices can go up and down with the excess inventory. At the point when inventory excess ceases to exist and demand gets close to equaling supply it does get real scary. You have businesses like UPS wondering how they are going to get the fuel in 1-2 years time. 1st Stage: This is already happening, for price where Jet Blue - Southwest have still been using oil at $55 because of hedging. They bought to secure price. But the oil they buy today to hedge cost them $135. 2nd Stage: they buy on futures market just to have access to oil at any price. I think unless we rebuild how we live as Mr. Simmons suggests we will have rationing in 2 years. buy on odd and even days like late 70's. Then the witch hunt will really begin
How does this effect Strata? They are worth more every day as every month more and more of energy crisis is exposed, if they are real. I am starting the have my doubts though. This Risk Free Shorting Zone they have created is very troubling. They must be doing something that is worth reporting.
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