Hi Sharky:

If you will recall, most here likely bought Connacher when oil was in the $60.00 or even below area and Connacher was still at least two years from production. It is amazing how we have changed our expectations in just two short years. The markets will adjust. One such adjustment is the prices that contractors can charge for labor, materials and overehead. At least in the short to mid term.

They still are not making any more oil. Though we are in the western developed world, likely reducing our oil consumtion, the developing world is still growing theirs. Maybe not at the 10-12% they were, but likely at 8 to 10 percent. Also, I am still of the belief that their is an intentional attack on all commodites by both the US and Chinese governments in order to get commodity costs down. At present, the US has interest in doing so due to our election cycle and the Chinese because they buy so many commodities.

Virtually all governments worldwide are expanding money supply at prodigous exponential rates. This will have posiive impact for all commodites, including oil. It will also fire up inflation. Historically, commodites flourish in inflationary environments. In fact they are just about the only asset class that does. It has ever been such and it likely will remain so. In an inflationary environment, historically invest in hard assets and not financials.

Brian