Weissman comment may be moving NG today. [From Y! CWEI board]
On RealMoney, he says that the June EIA numbers on ng consumption for power generation have shown a pronounced falloff. Says the July and August #'s not yet out. If this 4bcf/day is due to weather, and NOT ind. dem. destruction (ie. fertilizers, methanol, plastics, etc), then the full storage fear is gone. If this permabull is correct, there is little downside barring a very warm winter. We bot some Jan04 out of the money ng calls today, in case; and bot back some stocks. FWIW. Sand.
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This is an average of 4.46 bcf/day –- or 31.24 Bcf/week –- and explains more than 91% of the increase in injections between June of 2003 and June of 2002.
Further, surprisingly, very little of this decline in consumption appears to be due to the so-called "efficiency effect" – i.e., the increase in the efficiency of the generating fleet between June of 2002 and June of 2003. This is presumably because, in June of 2002, there apparently already were a large enough number of highly-efficient combined cycle units in service in most regions of the country so that very little inefficient generation was displaced by the additional combined cycle units added between June of 2002 and June of 2003.
Instead, as we have been advising subscribers to our weekly newsletter all summer long, approximately three-fourths of the reduction in use of natural gas to generate electricity consumption appears to be differences in temperatures between 2003 and 2002 in a number of key regions, including northern Illinois, the mid-Atlantic area, Michigan, the Carolinas, the Atlanta area and much of the South Central region outside of Texas.
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