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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (100800)5/13/2008 11:10:39 AM
From: Salt'n'Peppa  Read Replies (2) of 206266
 
The cynic in me wants to say that these NG supply comments are coming from a NG trader. He is attempting to make a market for his own profit with his comments.
NG has gone up huge since Jan 01/08. He has undoubtedly placed his bets on the short side, leveraged to the hilt as these traders are wont to do.
I think he is just trash talking NG for profit.

The analyst in me is looking for substance behind his claims.
Certainly the Barnett etc. are adding NG to the system but globally NG wells have notoriously fast decline rates. Is he addressing those in his calcs, or is he dangerously assuming a "status quo" for all existing NG wells?

A little red flag jumps up for me with the following:
"Right now, gas production is at record highs. Hurricane season and summer demand is always the wild card, but even some conservative estimates show that we finish with storage between 3.6 and 3.7 trillion cubic feet going into the winter."
Even some conservative estimates?
Are those really conservative or liberal estimates?
Subtle words like that thrown into the mix enter the average reader's mind and subconsciously become fact.

For sure new NG supply is up. No argument there from me, but is he telling the whole story?
He is not addressing rapid declines and there are a lot of "maybe's" and "potentially's" in this article.

That said, NG is ripe for a correction under normal market circumstances. No trash-talking required.

Bottom line.
He is a NG trader talking up his negative position in the NG market.
Always consider the source.

JMHO,
S&P
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