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To: Evolution who wrote (83304)	1/3/2001 11:39:05 AM
From: Tommaso	Respond to of 95453

It appears that, having learned their lessons from continuing to recommend techs and dot.coms, the investment advisors and "analysts" are now willing to issue actual sell signals on energy stocks. Add that advice to the previous and one can foresee a sudden influx of candidates for taxi medallions.

To: Evolution who wrote (83304)	1/3/2001 11:42:09 AM
From: Evolution	Read Replies (2) \| Respond to of 95453

XTO down 14%! I guess shorts are all over it! Looks early, but maybe just linked to news of warmer weather. Or is Slider scenario playing out early? Volume is already higher than average (as per yahoo). I can't find particular news on XTO. E.

To: Evolution who wrote (83304)	1/3/2001 11:55:22 AM
From: Evolution	Respond to of 95453

Prudential Daily futures Oulook, API estimates API Expectations: Forecast Year Ago 5 Year Ave 12/29/00 12/31/99 Stocks Level Distillates: Dn 0.5 (114) Dn 1.1 (124) 133 Gasoline: Up 2.0 (199) Dn 1.3 (191) 200 Crude: Dn 2.0 (287) Dn 0.8 (293) 305 Refinery runs: Up 0.6 (94.0) Up 0.4 (89.7) Distillate stocks will likely show only a slight draw as last week’s upswing in weather related consumption was probably offset by a continued strong pace of production and a heavy import flow. Seasonal tendencies favor distillate stock builds for this particular week. Gasoline stocks are expected to show a moderate increase due to incoming cargoes and a strong production pace. Crude supplies are anticipated to show a modest draw due to year end seasonal considerations. The refinery runs will likely show a modest increase due to some expected refinery turnaround completions in the east coast region. CRUDE: The crude market should receive another uplift today as it attempts to discount the likelihood on a 1.5 MB/D production cut that could emanate from the Jan 17 OPEC meeting. The market is also being underpinned by ongoing Mideast tensions and a shortfall in Iraqi exports. Estimates by Petrologistics are suggesting a plunge of almost 60% in Iraqi export activity last month as a result of the pricing dispute with the UN. Iraqi export activity is expected to remain halted for at least another week out of the important Ceyhan terminal. With most observers anticipating a tax related reduction in crude supplies per tonight’s API numbers, any surprises can be expected to fall on the bearish side. Finally, look for crude values to acquire relative support from further aggressive selling of the heating oil cracks amidst moderating temperature forecasts. From a broader perspective, the threat of an economic slowdown will continue to restrict sustained price strength. Consequently, we look for the market to seek some direction from the stock indexes early in the new year. Price outlook: We are still awaiting a potential rebound toward 28.00 basis Feb before approaching the short side. PRODUCTS: The front month heating oil contract should remain under downside pressure in relation to the rest of the complex given a milder temperature outlook for the northeast quadrant during the next couple of weeks. In view of the expected moderation in the weather patterns at what is usually the coldest point of the season, some stock rebuilding at the primary level could develop. Although prompt barrel premiums at NYH were reported early yesterday at as much as 4.00 cents over the Feb screen, these differentials narrowed considerably to less than 3.00 cents as yesterday’s trade progressed. Continued hefty discounts for European gasoil barrels and yesterday’s softening in the Jan/Feb gasoil switch are also bearish considerations. The gasoline market is deriving good support from an unusually strong spot trade where refiner buying remains in evidence ahead of an anticipated heavy refinery maintenance slate during the next couple of months. The east coast trade appears steady with prompt spot numbers at about a 50-100 point premium to the nearby Feb screen. Surprises in tonight’s numbers will likely fall on the bearish side as a moderate gasoline stock build could develop. Price outlook: We would still be a seller of the Feb heating oil contract on potential rallies to the 89.00-90.00 area risking to above the 91.50 level. Downside possibilities exist to the 82.00 area. The Feb gasoline contract still appears capable of testing the high side of our projected 75.00-81.00 range during the next few sessions. NATURAL GAS: Price consolidation is expected today following yesterday’s huge price plunge. The approximate 14% decline at the start of the year appears to have discounted a shift toward above normal temperature patterns across most of the mid continent out to about mid month. Additionally, today’s release of the AGA stats could shift the market focus back to the supply side where a decidedly bullish picture remains intact. We are anticipating a storage withdrawal of 160 BCF, a figure toward the low side of street guesstimates that cover a wide range of 130-230 BCF. While conceding to last week’s heavy residential consumption, we look for withdrawals to be limited by both fuel switching and demand destruction within the industrial sector. An expansion in the supply deficit appears inevitable given the year ago and 5 year average withdrawals of around 135 BCF. Price outlook: The market’s inability to hold anticipated support at the 8.50 level suggests further possible slippage toward the 7.60-7.80 support zone. However, such a pullback wouldn’t violate chart uptrends. A bullish trading posture is still favored amidst an anticipated volatile trade. ³JIM RITTERBUSCH The information contained herein is based on data obtained from recognized statistical services and other sources believed to be reliable. However, such information has not been verified by us, and we do not make any representations as to its accuracy or completeness. Any statements non-factual in nature constitute only current opinions, which are subject to change. Officers and directors of Prudential Securities Incorporated (or one of its affiliates) may have positions in futures and or options-on-futures referred to herein and may hereafter liquidate such positions. Neither the information, nor any opinion expressed, shall be construed to be, or constitute an offer to buy or sell or a solicitation of an offer to buy or sell any futures or options-on-futures contracts mentioned herein. Prudential Securities Incorporated from time to time, issues futures reports based on fundamentals, such as expected trends in supply and demand, as well as reports based on technical factors, such as price and volume movements. Since such reports rely upon different criteria, there may be instances when their conclusions are not in concert. Additional information on futures and options-on-futures is available upon request. This information is issued by Prudential Securities Incorporated and has been approved for distribution by Prudential-Bache Securities (U.K.) Inc., which is regulated by The Securities and Futures Authority Limited. **************************