Frank, it is that the rate of increase has slowed significantly during the last month, along with electricity consumption. The YOY gains are significant, but as we go into the warmer parts of the summer, the comparisons will be harder since we had record heat last year during this time in many parts of the country. I remember being in Denver and the Beaver Creek area last year during the summer and it being extraordinarily warm. There is always an increase in demand due to demographic growth considerations, but the high prices are beginning to take a bite and in May, US gasoline consumption was flat with April. One thing is for sure, SUV sales are hurting. Many who bought a Hummer last year don't look so smart today. I also believe that much of the advertised pumping capacity increases by OPEC are partially being offset by a lag in getting those supplies to market through shipping and other operations. They are adversely affected by lower Russian exports and Venezuela as well. So while we really have not seen anything too great in the news as of yet, I think the news will reflect this in another 4 weeks or so, if not sooner. Until then, the only long position I have is PBR, which is by far the cheapest oil and gas company on a cash flow per share basis.
Best regards, |
