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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Big Dog who started this subject1/27/2003 7:06:14 PM
From: quehubo  Read Replies (1) of 206175
 
Marshall Adkins must be reading BDBBR & Oilviews....

From him today:

After analyzing the weather and natural gas storage data through the first half of winter, we have found that our original winter gas storage model has been fairly close to our original prediction. After adjusting for weather differences, we estimate that economy-related (or industrial) gas demand is about 1 bcf/day lower than our original expectations. As expected, it also appears
that gas to residual fuel switching has already kicked in with a year-over-year change of about 1.35 bcf/day. After fine-tuning this gas storage model at the midway point, we still remain convinced that winter-ending storage is on track to theoretically finish below 700 bcf (even if the weather turns 6 ½ % warmer than normal for the remaining two months of winter). Since ending storage has never finished below 700 bcf, we believe the market will likely respond with even higher gas prices to squeeze even more gas demand out of the system over the next two months. How high will gas prices go? Depending on the weather, prices must continue to rise enough to kill (or fuel switch) an additional 1 to 5 bcf/day of natural gas demand over the
final 70 days of winter. That means gas prices are likely to continue moving well above $6/mcf even if the weather turns modestly warmer than normal. More importantly for investors, a winter-ending storage level below 800 bcf means a tight summer gas market and reinforces our view that U.S. natural gas prices are likely to remain above $5 per mcf for the foreseeable future.
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