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

To: steve from ihub who wrote (31479)	7/22/2003 10:26:41 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 36161

While the inventory levels look about average, actual demand for natural gas is greater than it was two years ago. Therefore, the inventory levels are RELATIVELY lower. The fact is that a greater percentage of fossil fuel for electricity generation now comes from natural gas than it did two years ago. That causes an increase in demand. The only way that the present inventory levels would be sufficient to cause the price of natural gas to drop is if the summer temperatures in the mid-Atlantic and northeast states remain below average. Right now, there is so much rain that overall temperatures are cooler, lightening the load on electric power, a great deal of which is made from natural gas. If winter temperatures are warmer than last year (again, a very cold year in the northeast), then the inventory levels appear to be sufficient to keep prices from rising too fast. But then there is a matter of adequate supply. The amount of natural gas actually used is greater than the additions to reserves, which also puts upward pressure on prices. Art

To: steve from ihub who wrote (31479)	7/22/2003 11:13:57 PM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 36161

Well when Greenspan spoke on NG the first time that was a sign. I'll admit it looked like we had a perfect storm brewing and possibly a once in a many year opportunity but too many things fell through and here we are. The issues on storage are more complicated than just a graph but watching the slope of that curve is always worthwhile. I went overweight in December / January in energy despite storage being ok because of the steep slope of that curve on the drawdown side prompting me to take notice. There are lots of factors effecting this so a picture is worth a thousand words :o) You need to keep revisiting this chart. See 2001 week 1 how low it was and where it ended up. Notice 2003 crossing 2001 around week 9 and where 2001 started from ? regards Kastel