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

To: excardog who wrote (6613)	2/11/2002 4:52:06 PM
From: excardog	Respond to of 206192

Crude Rallies As Brent Spikes On SPR News NEW YORK (Dow Jones)--Crude oil climbed above $21.00 a barrel in a late-session rally at the New York Mercantile Exchange on Monday, as traders reacted to a sudden spike in North Sea Brent prices. On London's International Petroleum Exchange, March Brent futures jumped $1.72 to $21.44 a barrel, a gain attributed by traders to a news report about a pending injection of crude oil into the U.S. Strategic Petroleum Reserve. According to the Department of Energy, Equiva Trading Co. is to deliver 18.6 million barrels of crude oil into the nation's strategic reserve between April 2002 and May 2003. Equiva's supply agreement is the first in a plan announced last November to fill the SPR to its 700-million-barrel capacity by using oil taken as in-kind royalty payment from federal leases in the Gulf of Mexico. Equiva is a Houston-based general partnership that provides supply and trading services for the U.S. refining and marketing alliances of Royal Dutch Shell Group (RD), ChevronTexaco Corp. (CVX) and Saudi Aramco (C.SAR). Although the yearlong delivery is expected to have little effect on supplies, the news, combined with word of a squeeze in the wet Brent market, was enough to trigger a sudden burst of buying on the IPE, traders said. The rally on the IPE, in turn, spilled over to push prices sharply higher on the Nymex, where a lot of traders found themselves caught short, analysts said. "The market had known that it was coming, but traders are nervous to carry short positions," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "With the escalation of the Palestinian conflict, the world is becoming day by day a more dangerous place. There is a lot less reason to be short." Nearby March crude oil futures, which had spent most of the session in negative territory, jumped $1.15 to close at $21.41 a barrel, well off their intraday low of $20.00 a barrel. March heating oil futures gained 2.85 cents to settle at 56.19 cents a gallon, while March gasoline futures ended at 62.00 cents a gallon, up 3.23 cents on the day. There was little else in the way of market-moving news. A senior official of Iran's Revolutionary Guards warned during the weekend that his forces will destroy Persian Gulf oil fields if the U.S. takes military action against Iran. Sardar Zolghadr, the deputy commander of the guards, said the oil fields in the region will be threatened because in the case of a U.S. attack on Iran, the country won't limit its defensive actions to within Iranian borders. Meanwhile, Iranian Oil Minister Bijan Namdar-Zananeh said Saturday the Organization of Petroleum Exporting Countries' output decision at its next meeting in March will depend on market conditions, the official Islamic Republic News Agency reported. Zanganeh had previously said he didn't expect OPEC to change its production level at the March meeting. In December, OPEC agreed to lower its official production quotas by 1.5 million barrels beginning Jan. 1. OPEC took the action after non-OPEC countries agreed to cut their output by about 500,000 barrels a day. Zanganeh said OPEC members' compliance with production quotas was 85%-86% in December, adding that compliance could be lower in January. However, he said the production cut would be fully implemented in February, asserting Iran had slashed its own output by 10% since the beginning of January. (MORE) Dow Jones Newswires 02-11-02

To: excardog who wrote (6613)	2/11/2002 5:50:25 PM
From: jim_p	Read Replies (1) \| Respond to of 206192

Scott, I've been calling around Houston all day today, and the pulse is very bearish. People in the business are starting to talk about $1.20 and 1.50 NG prices this spring. The people in the land business tell me they are still seeing projects cancelled and no sign of any increased activity on the horizon. Land is always the first to pick up, followed by seismic. This may sound bad, but as a rule, the market never turns until perception changes and people give up. It's the $1.50-2.00 NG that causes the next up cycle. As long as people think it will be 3.50 this fall, they will keep drilling and the price will never go up. The bottom is near, but it may be 2003 before it really takes off. Keep your eye on the back months of the NG futures. When the forward month exceeds the back months, the market just turned. JMHO, Jim

To: excardog who wrote (6613)	2/12/2002 2:03:55 AM
From: schrodingers_cat	Read Replies (1) \| Respond to of 206192

I was looking through some EIA data the other day and what struck me was that reality was the opposite of predictions for 2001. This time last year people were predicting soaring NG demand for summer 01 due to all the new power plants under construction. What actually happened was that industrial and electric utility demand dropped sharply in 01, wiping out about 1TCF of demand compared to the previous year.That is why the storage filled up. By comparison residential and commercial (ie heating) demand held up very well. I think industrial and commercial demand are highly price and economy sensitive, and residential and commercial demand are weather sensitive. With NG prices way down, that 1 TCF of lost demand may come back. If NG prices were to hit 1.50, we would discover how elastic demand is in the other direction. Bottom line is that I think the market will give up on NG this spring, since there will be record breaking storage levels. By late summer, it will be apparent that fill rates are sluggish and that maybe we won't hit full storage. Winter 02/03 might turn into a replay of winter 2000/1 if cold, otherwise we have to wait until 03 until prices get interesting again.