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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 (24585)	7/17/2003 1:40:51 PM
From: t4texas	Read Replies (2) \| Respond to of 206223

just the opposite is the understanding i have about oil and ng prices, i.e, the very high ng prices have caused electric power producers to move to oil for the generators that can. thus higher demand for oil in spite of higher gasoline inventories, etc. so oil has stayed over about $30. if ng gets big inventories again, then ng prices will decline and oil can decline again too. i don't think ng inventories are going to get too high, so unless iraq comes back oil should remain stubbornly high priced too.

To: jim_p who wrote (24585)	7/17/2003 3:42:36 PM
From: kollmhn	Respond to of 206223

Morgan's assessment: Research Abstract: * EIA reported a 93 Bcf increase in nat gas storage for week ended 7/11/03 This was in line with our 86-96 Bcf forecast range (consensus was 94-98 Bcf with a range of 84-106 Bcf. This compares to a prior year injection of 69 Bcf and the 5-yr average of 76 Bcf. * Our weather-only regression model implied a 69 Bcf injection. This implies 3.4 Bcf/day of nat gas demand remains out of the market, which is more reasonable than the 4.7 Bcf/day implied the previous week. * Still on pace for near-normal storage (~2.9 Tcf), but gas price drop/oil price rise has narrowed premium to residual fuel We continue to believe that inventories will reach a minimum of 2.9 Tcf (assuming normal weather and nuclear plant utilization) but the recent decline in nat gas prices, combined with a $31/bbl oil price, has narrowed the gas premium to resid to $0.15/MMBTU in the Gulf Coast region. . Moreover, ethane margins continue to support extraction (i.e. lower supply) while ammonia margins remain slightly positive. We therefore expect the market to tighten somewhat in the coming weeks as demand, at the margin, returns. This should support nat gas prices near current levels, provided crude remains in the $29-31/bbl range. * Our preliminary estimate for next week's injection is 75-85 Bcf. This incorporates ~2.7 Bcf/day of continued demand erosion. Inventories currently stand at 1,866 Bcf. With 112 days remaining in the injection season, a refill pace of 10.1 Bcf/day is needed to reach 3.0 Tcf by Nov 1. This is down 0.2 Bcf/day from last week's required refill and compares to the 5-year average pace of 8.0 Bcf/ over this timeframe.