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

To: excardog who wrote (87218)	2/14/2001 5:32:56 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Natural Gas Fuel Switching is Bigger than We Originally Thought Raymond James Energy “Stat of the Week”, February 12 "It is apparent that fuel switching has now created a “floor” for natural gas prices that is equivalent to the Btu content of heating oil. While short-term natural gas prices may fluctuate above or below this “floor,” we expect longer-term natural gas prices to be supported by heating oil prices. As the current heating oil futures strip suggests, natural gas prices should at least maintain a floor of roughly $5.50 to $6.00 per Mcf. Accordingly, we still feel very comfortable with our annual natural gas price forecast of $5.75 per Mcf." North American Natural Gas Supply is Not Responding to Increased Drilling Increased Fuel Switching Is the Real Shocker Widening Natural Gas vs. Heating Oil Spreads Drove Unprecedented Fuel Switching How Sustainable is This Fuel Switching? raymondjames.com

To: excardog who wrote (87218)	2/14/2001 6:10:01 PM
From: isopatch	Read Replies (1) \| Respond to of 95453

Excardog. Could be important NG breakdown Looking at the daily chart it's easy to see the big drop from the top in early January then a "saw tooth", sideways consolidation pattern. futures.tradingcharts.com When a pattern has had a couple of weeks to form as in this case? A breakdown such as we had today could be important and take is down to the very lo 5s fairly quickly. But what's much more important is that UNLESS she quickly rallies back up (by the end of the week IMO) the old support in the very hi 5s and low 6s becomes resistance to any rally. And the NG market will settle into a new lower trading range between 5 and 6 unless we get a full week or more VERY cold arctic temps. So far there's no evidence of this in the extended forecast. If this new, lower trading range for NG does settle in? It doesn't take rocket science to realize there's more weakness ahead for the NG E&Ps. For one thing, it's likely that many more of them will tank as soon as they report their earnings. The 1st part of the scenario that only a few of us have vigorously presented on this thread for over a month has already occurred. The initial big drop from $10 NG "into the 5s". Now it's time for part 2. Sustained prices in the 5s, and going at least briefly into the $4s during the next month or two. Folks don't believe the perma bulls here for even one minute when they claim the NG E&Ps won't can't decline significantly in price because they're already priced to reflect $3/mcf gas. They can present all the FA they want, but the market WILL still take these stocks down further. Guaranteed! How far? IMO, nobody can answer that precisely. All we need to know is that the trend is down and the vast majority of these stocks will break below their Jan correction lows. After that it's our job to follow the TA and the tape till there's evidence that an important bottom is forming. I DON'T expect that to happen soon. Special situations like the CA gassers still have some potential and will do better than the others in the near term. I've played ROYL already and may reload at lower prices the part of my position sold a couple of days ago at 6 15/16. But even those will eventually have to be liquidated before they also undergo corrections from their rally peaks. This game is never easy but it's never boring either, lol. Best Isopatch