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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: anyer who wrote (3890)8/29/2001 7:46:32 PM
From: stan_hughes  Read Replies (1) of 206085
 
anyer - Hope you weren't left with the impression that I thought the OSX was a buy here on the basis that it's wiped out 2 years of progress. In fact, I was really trying to draw attention to what it portends for the future.

Although I concede on the switching rationale, I doubt we've seen the low on NG. Too much supply short term, which is getting stashed and holding down the long end too. IMO at a minimum we're going back to where we came from. Katie bar the door if we achieve physical storage max this October and they can't even give it away.

I think I also draw different conclusions from the OSX action about future oil prices than you. I agree with you about ignoring the analysts but I try not to ignore the tape, and OSX and XOI are telling us that prices aren't staying up here. With NG already in the dumper, oil would be next (as opposed to NG rising to get back in line).

I view NG as a leading indicator here. Oil prices might be manipulated, but one false step on the part of OPEC and you'll see your $18 in a NY minute. Consider that this recession is now being exported overseas to the real oil users, and managing supply to a mid-$20s price regime is going to get trickier with every slow passing month. Betting on OPEC is a big gamble.

I know the North Sea is peaking. I know we could have a war in the Middle East. And maybe we get lucky and hold the fort for the next 6 months because of seasonal heating demand, but the global economy had better be perking come next spring or we'll be awash in not only NG but oil as well.

What a farking mess we'll have if that happens.
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