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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: quehubo who wrote (26397)	10/16/2003 10:27:17 AM
From: Ed Ajootian	Read Replies (2) of 206093

We are re-iterating our bullish stance on the E&P sector in light of what we would characterize as a sophomoric view on underground storage inventories put forth by the natural gas bears. This view looks at the weekly change in inventories (released Thursday’s at 10:30 EDT) adjusted by any weather related demand and says that the difference (usually an excess build in storage) relates solely to lost demand e.g., either fuel switching or reduced industrial gas demand. We take exception with this analysis as it does not take into account other important storage related determinants, principally the shape of the forward price curve of natural gas and the severely depressed state of North American wellhead or field supplies. We believe that investors would be well served at looking at these other factors that relate more to the fundamental wellhead supply picture rather than storage. We remind investors that storage, after all, is inventory which by its very definition is transitory in nature. We are maintaining our $4.75 per Mcf 2004 U.S. natural gas price forecast on which our stock ratings are premised. With E&P stocks off 15% from their mid-June high we would use any weakness created by the storage bears here at the end of the of the re-fill season to purchase E&P stocks. Such purchases may provide near-term outperformance and an attractive entry point into the long-term story for North American natural gas. &&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& Gotta luv it -- a sophomoric view on underground storage! Above is from a piece issued by Buckingham Research Group, full copy of which has been emailed to you for consideration of posting on Oilviews.

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