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Politics : High Tolerance Plasticity

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To: kodiak_bull who started this subject	5/7/2001 3:45:35 PM
From: JungleInvestor	Read Replies (1) of 23153

Another point of view on future NG price from VPI Yahoo board: NG Storage going up by: danwilson_Yorkshire 05/07/01 02:41 pm EDT Msg: 19454 of 19458 Lots of reasons for this but IMO there are two primary reasons; 1. Simply the fact that storage levels are so far behind where they need to be if we have any chance to reach 3 TCF by Nov. 1st. > The companies that serve our nation's NG demand risk loosing market share if they don't have enough inventory and (more importantly) they must maintain pressure in the system or it will really get nasty. 2. The NG price curve. The NG contracts on NYMEX are higher in the out-months so it appears there would be a penalty for waiting to fill storage. This situation was reversed last year. Stay focused on actual storage levels: If injections to storage stay at 100 BCF per week for the next 5 weeks we will have caught up to where we were last year. However, it will take 16 straight weeks at 100 BCF to get us on target to reach 3 TCF when we start next winter. Do any of you believe we can maintain the current injection level in July & August? Let's say we can get NG storage back to 2.7 TCF by Nov. 1. That means we enter next winter at the same level which resulted in $10/mcf in Jan. 2001. BTW we entered last winter with a lot of Canadian gas in storage. If you are worried about a sharp decline in NG prices, there are a couple members of the Sweet 16 that have hedged a significant portion of their 2001 production at attractive prices. AHC and COG both have hedges in place at over $5.00/mmbtu. BTW Dr. Economides was on the EnergyNewsLive panel discussion this morning. His comments: > The percentage of U.S. Energy needs met by natural gas will continue to increase at a steady rate. > Conservation to solve our current energy problem won't work. At most it can only reduce demand by a couple percentage points. Americans just won't pay the price. > Increased use of coal is just a "stop gap"; coal industry will continue to die a slow death. NG will win out as the fuel of choice. Dr. E is speaking at a luncheon in Houston on Wed. that I plan to attend.

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