Big Dog's Boom Boom Room Message Board

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

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To: quehubo who wrote (37046)	12/3/2004 12:19:40 AM
From: Archie Meeties	Read Replies (1) of 206165

Que, I think the question will soon become "Will ng spot fall to $5?" Looking at the data over that past few years, I see that price as a major inflection point for exploration decisions. Oil inventories can be avg., ng inventories can be way above avg, but as long as spot prices and the futures market is broadcasting (erroneously) $>5 ng, drilling will continue at least at current rates. Approaching this level, however, and historical data suggests you'll see a fall in permits, with a bigger fall if under $4.50, and collapse under $4. I'm not sure if it's the prices that have killed demand. But if so, these prices are not going to change this season. Also, a 0.6 billion cf/d LNG facility is coming online in about a week. The response at HH should give us a clue about the sustainability of these prices.

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