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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (27651)	2/6/2003 5:35:15 PM
From: jimsioi	Read Replies (1) \| Respond to of 36161

ISO re the NG Storage Table Viewing the table your provided of NG storage, we see a fast draw in '03 on an already low storage level relative to most years. The rate of decline and absolute storage level is lower this year than in 2000 at the same time. It was in 2000 of course that NG had its parabolic run cresting at $10 and many became first involved in E&P stocks. Taking a look at a longer-term monthly chart of NG, and your table, we see that in 96 and 97 storage levels were lower than they are currently. Prices in the first part of those years were in the $2 area though they rallied into the higher and mid fours in the latter months of each year. In early 2000 NG prices were still under $3. So the market seems to be saying the situation is much worse, now, supply demand wise, by according a higher front month price this year, though storage is greater than in 96 & 97, and about one cold week's worth of difference lower in '03 than '00. … …Are we seeing a similar under performance pattern in the stocks vs the commodity as being seen in the miners?? I read similar complaints. I do think the mid cap NG stocks, hopefully more specifically the ones I own, will have earnings significantly improving to right the ship between the commodity's advance and the shares appreciation once the first quarter results are available. Lastly, looking at a longer term chart of the XNG (Natural Gas Index of a sort) we see that in March of 96 a rally began that would crest with prices for gas in the later part of that year. With storage still low and prices rallying again over $4 for NG in '97, the XNG rose by late '97 but not quite the levels attained the year earlier in keeping with the fact that NG prices didn't get as high in '97. In 2000 the XNG rally didn't begin until March….and as any reader of this board knows the move ended right at the end of the year. SO…I suspect, given storage levels and prior patterns, the move in the E&Ps will have noticably commenced by the end of March and will run through till the end of the year. …assuming its not a great deal different this time. March Gas charts3.barchart.com Longer term monthly NG Chart futures.tradingcharts.com Longer Term XNG Chart stockcharts.com[h,a]mbcaynay[d19950206,20030206][pc10!c20!f][iut]&pref=G jims101