Smaller energy companies will enjoy an exponential growth of revenues and profits with strong fundamentals of supply and demand now dominating the global oil and gas market, officials of the Magnum Financial Group said Friday.
"Political and economic pressures assure that oil production levels are stabilizing commodity prices for the foreseeable future," said Brian M. Schkeryantz, senior analyst for the New York-based financial advisory firm.
The upstream side of the oil and gas industry should remain strong through next year, said Magnum officials in a report issued Friday that focuses on small capitalization companies. They said strong market fundamentals should sustain "historically high" commodities prices, generating healthy revenue streams and profit margins for oil and gas producers, big and small, through 2001.
US consumers and economists both were caught off-guard by the recent surge in domestic demand for oil, stemming from increased automotive travel and the additional fuel consumption of the popular sport-utility vehicles in this country, analysts said.
That has affected US fuel-refining capacity�which remains slightly behind the demand curve�and adds to the inflationary pressure on energy prices, they said.
US demand for natural gas also is exceeding supply, they said. As a result, gas prices have pushed up to nearly double its value from a year ago, Magnum officials said.
