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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Big Dog who wrote (37081)12/4/2004 10:07:36 AM
From: quehubo   of 206175
 
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.

True but the first 8 weeks of draws reveal enough about what will happen over the next 13 weeks.

There was plenty of hype going into this Winter about heating oil, OPEC could not provide enough oil to cover peak demand, and insufficient ng to cover Winter needs.

Once the market starts discounting a potential 500 bcf year over year storage excess by April 1 I wont be holding my 1/3 long exposure. I can always keep some OOM calls just in case Saudia Arabian production is bombed.

PTEN & NBR need producers to be hungry to procure that incremental bit at higher day rates, what happens to equities when there is a hint in a slow down in activity?

Who is to say this apparent supply demand problem is not from a load of mom & pops or other producers who held back supply until November 1?

My bet is not to fight the weather patterns and that at these equity valuations there is plenty of downside risk as this Winter is written off and we shift to how little needs to be put in storage to get refilled and what happens if we have a mild Summer again.

Of course if the weather does a complete flip side for the first 8 weeks of the New Year we wont have any worries about excess gas.
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