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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Eclectus who wrote (61454)	3/4/2000 10:16:00 AM
From: Think4Yourself	Respond to of 95453

Let's see here: Do we believe some ANALyst from a no name consulting firm, or the CEO of EOG? Natural gas prices show surprising off-season rise By MICHAEL DAVIS Copyright 2000 Houston Chronicle Natural gas prices have been staging a quiet rally in the last two weeks amid loud complaints about soaring oil and gasoline prices. Natural gas, not crude oil, is the most important commodity for many of the energy companies in Houston and elsewhere in the United States. They are now enjoying some of the best prices they have seen since November. The timing of the rally is unusual. Natural gas prices normally peak twice a year, in the coldest months of winter, when the fuel is used for heating, and in the hottest months of summer, when natural gas is increasingly burned to generate more electricity for air conditioning. March and April are normally a period of declining demand. The winter heating season is about over and it's not hot enough for most of the nation to fire up their air conditioners. Natural gas for delivery in April closed Friday at $2.825 per thousand cubic feet, up 4.2 cents. Two weeks ago, the near-month contract was trading around $2.50. The so-called out months are trading even higher. The August and September contracts both closed Friday at $2.88 per thousand cubic feet. Prices did not reach such levels during the coldest part of the winter -- in late January, when New England and the Atlantic seaboard were socked in with snow and ice for more than a week. Natural gas topped out during that cold snap at $2.74 on Feb. 4. Natural gas prices are not being pulled up by higher oil prices. The two commodities no longer trade in tandem as they once did because natural gas is sold into a purely domestic U.S. market while oil prices are set by world markets. How long the current rally will last is a matter of debate. Some say it is a short-term phenomenon, the product of hype and hysteria among traders in New York. "These are very good prices, but they are very much on the high side of where they should be," said Nizam Sharief, director of energy research at Hornsby & Co., a Houston-based energy consulting firm. "There should be enough increased drilling and higher imports this year to handle any increases in demand." Others in the energy industry see things more ominously for consumers. They warn that the current rally could signal a serious long-term imbalance between increasing demand and waning supply. Last year, the United States consumed about 21.4 trillion cubic feet of natural gas but produced only 18.7 trillion. Imports for the year totaled 3.38 trillion cubic feet, according to the Energy Information Administration, the research arm of the U.S. Department of Energy. Natural gas supplies are decreasing at a time when more rigs are drilling for gas than at any time in the past 10 years. Baker Hughes reported Friday that 609 rigs are drilling for gas and 181 exploring for oil. In 1990, the average number of rigs drilling for gas during the year was 470. "We will need at least 650 rigs exploring for natural gas year-round just to keep production flat with demand," said Mark Papa, chief executive of EOG Resources, whose business is about 80 percent natural gas production. With cold weather mostly out of the equation now, traders are bidding up the price based on declines in the amount of natural gas in storage. The American Gas Association reported this week that the amount of working gas in storage declined 5.84 percent at the end of last week compared with the previous week. In some regions of the country, gas inventories were as low as 35 percent below levels at this time last year. Supplies are dwindling despite temperatures that should have meant weak demand. Last winter was one of the warmest of the century. This winter appears to have been even warmer when measured by the number of days that most of the nation requires heating. The price of heating oil, which rallied during the cold months, has begun to decline, but the price of gasoline has spiked up in anticipation of the driving season. April heating oil fell 0.57 cent Friday to 78.89 cents per gallon on the New York Mercantile Exchange. Other energy prices also fell after estimates were released indicating that the Organization of the Petroleum Exporting Countries has already begun to increase production ahead of its March 27 meeting, when it is expected formally to raise its production quotas. Light, sweet crude oil for delivery in April closed Friday on the Merc at $31.51, down 18 cents per barrel. The April wholesale gasoline contract closed at 97.61 cents per gallon, down 1.19 cents. The North Sea benchmark Brent crude ended 23 cents lower at $28.99 a barrel, still within sight of the nine-year peak of $29.47 reached Thursday. Those hoping for a decline in oil prices got some encouragement from the Venezuelan energy minister, who predicted that OPEC members would agree to increase oil output before their meeting March 27. Ali Rodriguez, who will be talking to other members of the group, said both the amount of the proposed increase and the timing have not been decided. U.S. Energy Secretary Bill Richardson, back in Washington after visiting four oil-producing countries, said he is hopeful that OPEC and the other major producers will increase their production enough to moderate prices. Richardson visited two OPEC members -- Saudi Arabia and Kuwait -- as well as the non-aligned producers Mexico and Norway -- to express U.S. concern over high oil prices. "I believe we met with significant success," Richardson said. He took pains to praise Kuwait, a country that previously had been hawkish about keeping oil prices high, for reconsidering production levels. "They're very open," Richardson said. "That's all we ask." On Capitol Hill, Rep. Benjamin Gilman, R-N.Y., chairman of the House International Relations Committee, announced plans this week to introduce legislation that would cut off U.S. aid to any OPEC or other major producing nation that engaged in price fixing. Richardson said the administration would not support levying sanctions against any of these countries.

To: Eclectus who wrote (61454)	3/4/2000 10:42:00 AM
From: Brian P.	Read Replies (1) \| Respond to of 95453

<<Part of the problem is that investors are so tech-centric that other strong areas of the market are getting little respect.>> Natural gas stocks were touted on Rukeyser by a utilties fund manager with 50% of her fund in telecom stocks. This woman is copying my strategy! (vbg): divide your portfolio between techs and oil & gas: <<Global Crossing Recommended by Fund Manager on PBS' `Rukeyser' Owings Mills, Maryland, March 3 (Bloomberg) -- Global Crossing Ltd., which is building a worldwide telcommunications network, is set to see its stock rise as it expands, said a fund manager on ``Wall Street Week With Louis Rukeyser.' ... Global Crossing, which provides voice and Internet services with operations in North and South America, is expected to expand in Europe and Asia, ``with some very interesting deals likely to be announced in the next six months,' said Maura Shaughnessy, who oversees MFS Utilities Fund. She expects to stock to climb to 75 from today's close of 56 7/16. The Hamilton, Bermuda-based company sells time on undersea and land-based fiber-optic networks to other phone companies, businesses and consumers. Germany's largest telephone company, Deutsche Telekom AG, held talks to buy Global Crossing, a person familiar with the situation said. ``The consolidation in the telecom industry is going to continue,' said Shaughnessy. ``We'll have just four or five companies ruling telecom land in the next three to five years.' Shaughnessy has 50 percent of the MFS Utilities Fund, part of Boston-based MFS Investment Management, held in telecom stocks. She has 25 percent in natural-gas companies and the remaining 25 percent in electricity companies. She recommended Houston-based Enron Corp., the world's largest marketer of power and natural gas, saying the company is ``the biggest winner of deregulation.' Enron fell 1/8 to 68 1/2. She also recommended El Paso Energy Corp., owner of the biggest U.S. network of interstate natural-gas pipeline, and mentioned CMS Energy Corp. and Pico Holdings Inc. Mar/03/2000 23:22 >>

To: Eclectus who wrote (61454)	3/4/2000 11:46:00 AM
From: BigBull	Read Replies (2) \| Respond to of 95453

Eclectus, Leeb got bullish on inflation scenarios way to early. Can I say he's been a broken clock bull on inflation? He may finally be right. I don't think he's paid enough attention to the very powerful dis-inflationary forces in the economies of the world, so he jumped the gun. Hey look, I'm not bashing the guy, he's made some good calls over the years and I think he's got this one nailed, but he reminds me a bit of my first "investment hero" Jimmy Rogers. I still like Rogers for his uncanny ability to get to the party early in emerging markets countries, but he's been saying inflation's lurking just around the corner when it hasn't been for the last decade. IMO - NOW it is.