I would sure like to see some cool regression analysis plotting the relationship between weather and gas pricing and stock pricing. My feeling is that the eventual stock pricing is not as sensitive to the weather as to merit such close attention.
While there is no doubt that weather creates or diminishes demand, to some extent, operators (oil companies) are not basing their drilling plans on the weather forecast for the next ten days.
Maybe "the market" does indeed respond in a knee-jerk way to short-term weather, but I don't think NBR or PTEN (for example) lose any leverage because of the 10-day forecast -- be it colder or warmer than normal.
I have long wondered why in the world drillers, with typically 100% of their assets affected by the pricing of two commodities (oil and gas), don't construct hedging programs much like the E&P companies. I would bet an 8x10 glossy picture of Frank's wife punching the time clock at SearsMart that one could invent a basket of "stuff" to buy or sell forward that would have a decent correlation to rig day rate movements, thus providing downside protection in the event of a commodity pricing collapse. In fact, I have suggested this approach to some folks as a way to provides a certain level of "insurance" when buying or building an offshore rig. No one seems to "get it". Call me crazy, but it seems so obvious.
Anyone smart enough and have enough spare time to do regression analysis (I can barely spell it, much less do it!)? Maybe we can start a business inventing the hedge and selling it to drillers and other parties with an interest in the earning power of drilling rigs...investors, banks, etc. Jimp, maybe that's something for us to do now that you've wore the shine off that new wife of yours, and have explored every stinkin hill in CO. <g>
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