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COLSMITH - Tue, 31 Dec 02 :

Clearly Dana moves with price moves on oil but lower price for oil not IMO a bad position for oil producers because a too high price will stifle economic activity and cause a reduction in oil demand so OPEC view of price stabilty seems practical. So the question for Dana should be wheather a price in range 22-28 will give the profits and we should not look for 35 - 40 as good news even if short term it gives a shot into profit line. Longer term its reasonable to assume supply will move to just support demand unless some huge reserves found somewhere or of course Iraq comes fuly on stream (maybe this is what US position is really about stabilty of oil supply). Mitigating this is that much oil comes from parts of world not economically or politicaly stable so there maybe there will be the ever present fine balance between supply and demand particualry as places like China start to use more of the stuff. Also noticed this week Japan has need for increased supply as problems with theier Nuclear power plants means they have shut down some. Would have thought this places a company with reserves in a good position for many years provided world economic activy is not negativley affected. This all seems positive for Dana and if markets pick up generally Dana should also - independent of any re-rating?


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