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

To: isopatch who wrote (84833)	1/20/2001 4:42:02 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 95453

Isopatch...as I always regard you're opinion highly, just wanted to run a thought experiment by you. With the Cali electricity crisis, it appears that one main concern (valid, IMO) of the power generators are the relative volatility of the NTG markets. As a result, it seems reasonably that they will attempt to lock up supply more and more by buying forward on the futures market. The worse the situation gets in California, the more we will see forward buying. In addition, won't more direct long term NTG selling to utilities be a solution to their supply concerns? (There was an interesting article in Barron's on EOG's selling forward production to Calpine today that spotlights this trend). interactive.wsj.com If so, that will dampen the traditional cyclicality of the NTG demand (as will the fact that a greater fraction of demand will go to electricity generation in general in the near to medium future). Obviously, drillers will benefit...but NTG E&P's may see a shallower trough than usual as well (not to say they won't go down from here...but perhaps less deeply and for a shorter period). Obviously, flattening the swings in the price curve could benefit the Gas royalty trusts as well. I am aware that the various oil and NTG related industries are cyclical. Just wondering how much the above factors are likely to be "priced in" as we enter the next downturn. Your comments are welcome as always. Regards, Patron