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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (90523)9/15/2007 4:18:18 PM
From: 1coolpiglet  Read Replies (2) of 206131
 
NG prices averaged $7 last winter (range 5.74-9.05) with HDD's 6-7% less than normal (fourth warmest in the last thirty years). That makes it seem that a normal winter would produce prices considerably higher. $10+ and an ending storage number in the mid-1100's sounds about right. Cold weather at the beginning of winter will spike prices much higher than later on, as we saw last year.

One interesting thing is that since LNG imports have come down over the last couple weeks, the supply/demand equation ex-weather is about to head into winter tighter than last year, even with all the domestic production growth. NG under RFO is the huge factor in this (almost a 1.5bcfpd yoy tightening starting in October).

CDD's this summer being close to last year doesn't tell the whole story. The summer injection slope is exponential (plot it if you want to see)..not linear like the winter slope. It's the extreme heat that really affects gas-fired generation demand. On that front this year was nothing like last year, with the hottest week at 93 versus a three-week period last year at 102, 91, and 105.

It looks as if the winter energy equity rally is well under way. Now it's just a matter of selling in the coming months. I mean that's if you're into trading and all that.
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