Although oil prices have declined by some 24% since its high level of $147, unfortunately, our dependency haven’t. We continue to rely on oil as the main foundation of our current civilization and despite the claimed efforts to discover new alternative energy - that seems too far in the future. The production of one barrel of oil is still way below the current levels; even if we see some of the forecasts come true about the $90 bbl. With recent discoveries in West Africa and the intended ease on oil regulation in the US, I believe the current direction would be to increase the exploration of oil wells around the world and hence, more business for companies like WEL. With its establish position in the international market and reach from the <st1:country-region w:st="on"> Americas </st1:country-region> , through Africa to the <st1:place w:st="on"> Middle East </st1:place> , I strongly believe in strong growth in WEL's returns. This should ultimately drive the market prices upward but some negative price reactions may be expected as the oil drops to some numbers we haven’t seen in a while. <o:p> </o:p>
In addition, oil prices have been one of the main factors driving world wide inflation but companies providing complementary equipment and products should easily pass over any inflation to their customers. The main risk in my view would be if the claims raised that oil prices have reached these ridicules levels because of speculators and having seen some reports that the <st1:country-region w:st="on"> <st1:place w:st="on"> US </st1:place> </st1:country-region> may consider putting a ban or limitation on oil trading for non-oil consumers may drive such fictitious demand downwards. However, I do not foresee any of this happening in the near future. <o:p> </o:p>
$2.66 (08/15/08)
