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

To: jim_p who wrote (24173)	6/28/2003 8:55:00 AM
From: quehubo	Read Replies (2) \| Respond to of 206093

Jim: I have no doubt that there will be a cycle and that they will be shorter. What I am trying to come to grips with is how much demand will return as prices slide once supply exceeds demand at certain prices. I think we tested $6.00 - $6.50 prices in June and found that in June the buyers were buying for storage. At <$5.50 demand will return from #2 oil, At <$4.25 demand will return from #6 oil, As the price slides demand that is either out of service or at reduce operations will increase. My guess is that June and July will prove that $6.50 is too high and that $5.30~ is too low because NG demand returning from #2 oil will be good for 1.5+bcfpd. Since we did not get a significant supply response in the cycle ending in 2001, I doubt we will see anything before Q2 2004 coming from the present drilling increase preceded by a 1 year very high base drilling activity level that yielded a 5% decrease in supply. Next Winter's weather will provide the answer whether prices can slide enough to permit NG demand to stay off of #2 oil or not. If we have another 1 in 100 year warm Winters we may find out how much demand returns as prices slide. The unknown is at what point will E&P's decide prices do not support drilling at the drilling levels at the time?

To: jim_p who wrote (24173)	6/28/2003 12:05:15 PM
From: KyrosL	Read Replies (3) \| Respond to of 206093

>>If oil falls back to the $20.00 level, there is no reason NG will not fall back to $2-3.00.<< The big question in my mind is how will the picture change as we approach oil peak -- could we be there already? What are the signs, if any, that tell us that the old cycles will no longer repeat in their familiar ways? When is the time we ought to buy the dips and hold, because trading will only result in missing the big runup that will come inevitably when oil peak is universally recognized?