[solops]

Originally posted by Kamog:
I wonder why the stock market has been going up these Last few days? Before the war started, the market was dropping and it was thought that this was because people were worried that there's going to be a war. Now that it has begun, the market is going up, I don't understand. They're saying that it's going up because people think that the war is going to be short. The stock market seems to make no sense. Oil prices going up and down don't seem to make sense either?

As far as oil prices go, the problem now is primarily due to the unsettled situation in Venezuela. The Iraqi situation simply exacerbates it. Once the Iraqi war is settled prices will probably drop a bit. Until they do, there is little incentive for the Venezuelan government to completely settle the strike, since they are making more money with less production given the high prices. When lower prices result from increased Iraqi production, the Venezuelans will probably settle up the strike completely to raise production and maintain cash flow. Then oil prices will really drop some. There will be no relief from the US domestic industry. Prospects are scarcer than ever and those that are drilled have lower reserves and shorter lives than ever before, on average. Also, the industry could mobilise 4100 rigs in 1981. Now we bust a gut to field 900. To get 1300 in operation means some real junk is deployed and costs skyrocket.