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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Bearcatbob who wrote (18016)2/8/2003 4:53:12 PM
From: quehubo  Read Replies (1) of 206121
 
Bearcat - There is little relation today at the low end of pricing between oil prices and nat gas prices.

As a result of the environmental driven movement to move from oil use to NG use the parity pricing is not applicable for the most part.

New homes are being heated with what?

99% of All new power plants in the USA have NG as the primary fuel.

Many oil and gas fired plants have restrictions on how much oil they can burn in a year. Also they may have to buy more emissions credits.

Parity pricing comes in when big industrial users want to switch from NG to #2 oil. #6 oil is not much of a factor any more.

Come mid-April with stocks very low and supply very weak, utilities who have to use NG to generate summer cooling demand power and also stock up for Winter heating demand wont be worried if WTI is $35 or $25.

Until the market sees NG storage in USA & Canada increasing at a rate that indicates production is increasing the market will pay whatever it takes to ensure they store enough gas next Winter.

Do you pay $7 for gas this April or $15 in January?

Where do you think we are going if storage ends at <700 bcf and production is only 47bcf(minus 6%) and dropping 2-3% annually?

With this present weather Canada will be in worse shape than the USA.
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