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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Richard D who wrote (51923)9/28/1999 1:07:00 AM
From: Douglas V. Fant  Read Replies (2) of 95453
 
RichardD., A crusty old facilities engineer recommended that we buy PTEN at $2/share about 13 months ago- sorry that I did not follow that idea!

Yes oil broke out on the upside above its October 1997 peak of $23.15/bbl wti about two weeks ago. Well as to natural gas something happened two weeks ago that people may have missed.

A couple of weeks ago weather was mild/cool pretty much across the US, so natural gas usage was low.

Simultaneously NG prices slumped back into the $2.49/mcf range. Well if you are a consumer, that was the prime time to buy NG and put it into storage in preparation for winter heating season.

So NG in storage should have really spiked the following week. Yet AGA Numbers the next week only showed an increase in storage of 70 bcf of NG- slightly over one day's usage (55bcf/day) on an average day in North America.

I play now and then on a hockey team that has a number of people are in the energy/OS industries including gas-related companies like Duke Energy, Enron, CMS. We discussed this issue tonight at practice and collectively concluded (just four feeble minds in the industry, mind you now) that the minimal spike in NG storage figures from two weeks ago when demand was minimal confirms that deliverability is pretty weak in North America right now.

So NG demand is there, yet deliverability has faded, and not enough rigs are currently running either onshore or offshore to maintain current production/deliverability....
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