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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (3895)	8/29/2001 10:35:54 PM
From: Second_Titan	Read Replies (1) \| Respond to of 206085

Stan, several things I keep telling myself about NG: 1) The bubble was created by high NG prices, not production increases. Even with less industrial demand the fuel switching for power generation is the key to the bubble. Without high prices, at least 500 bcf of NG would not have been displaced by oil. Where would we be today with 500 bcf less gas in storage? A hell of allot more oil, but less gas in storage; 2) Winter weather is the key to demand this Winter, a normal Winter will clear the bubble inventory; 3) Oil prices are unlikely to collapse this Winter, not from present stock levels which are below normal forward days coverage; 4) At least 40,000 MW of NG fired capacity came online this Summer, this Winter this will cause even more NG demand and less oil demand than a normal Winter, 5) By Spring a significant amount of nuclear power will be ofline through next Summer relative to the last few Summers. 6) Present price levels are reducing drilling for NG. So my point being NG bulls may have to hide for a quarter or two, but a normal Winter with low NG prices will ensure a very high probability of a resurrection of the NG bull by Spring. Another 40,000 MW of NG fired power is under construction as we speak and scheduled for operation next Summer. I am not a proponent of buying E&P's as they are priced for $4 NG. But if the Winter looks normal and OSX is lower or the same in November I will be ready to jump in with two feet.