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

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To: Ed Ajootian who wrote (99865)	4/26/2008 6:56:17 PM
From: quehubo	Read Replies (3) of 206126

My thoughts towards storage are generally that we had about 300 bcf of cushion from last years ~1,550 to this years 1,250~. Now to get that back we need $10-12. Now if we start the Winter with 3,200 and assume a 2,200 bcf draw as normal then NG is going to move towards parity with heating oil. So lets say $18-24 to draw 2,200 down to 1,000 bcf. Now if the market sees a trajectory below 1,000 them ng goes above HO prices. The present situation is totally new territory IMO as I dont know where the ng is being consumed. What are the price sensitivities now? In the years past it appeared to me $8-10 did allot of demand destruction, not through fuel switching. My guess is that electric prices are going to go ballistic this Summer and Al Gore will be tar and feathered when the August electric bills arrive. A normal Summer will cool off prices. It could be the only sizeable place to reduce ng consumption is through switching to HO.

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