Analysis & Forecasting are two different things but share much in common. In either case, they are both an Art not a refined Science.There are many schools of Analysis and the results of the Data analyzed can be quite different. Looking at a glass that has a quantity of liquid in it can be interpreted as being partly filled or partly empty.Looking at Employment, one can say that 96% of Americans are employed or that there is 4% Unemployment.The January S&P Analysis and Forecast was probably based on Data that had been current a few months earlier. Based on those numbers, these Analysts tried to project the future, with the Assumption there would be no Major Economic, Political or Environmental changes in the interim.As we know, there have been significant Economic changes in the Eastern Economies, as well as Environmental variations in the West that had an impact on the demand for energy. As to the accuracy and viability of Forecasts, how often is the Weatherman correct in their forecasts? Most of the time, but on occasions they will say it will be a beautiful sunny day and then it pours on your Picnic.
The specifics of Analysis and Forecasting are arcane, and far beyond my poor power to comprehend. However, it is certain that they are using more oil, than they are making. Therefore, over the long term, we will experience dwindling supplies. How long is unknown, but five to ten years is a reasonable projection. In that time it will be necessary to go boldly where no man has gone before to look for oil, black gold, Texas tea. This will require drilling in deep wells, far from shore. It takes five to ten years to gear up, and build the kind of platforms that do this drilling, so companies that have the rigs are sure to be in demand. Interestingly, due to short-sightedness of typical investors and fund managers, these stocks are beat up and out of favor. Your money may do better elsewhere before these stocks hit there stride, but once the demand is on, you will have to be careful to not miss the boat. Did someody say "DO, NE, RIG, FLC"? No, I am not a financial analyst nor in the oil industry. But I did sleep in a holiday inn, and it makes me feel smart.(Maybe I have been watching too much TV.)
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