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To: ms.smartest.person who wrote (1234)	7/11/2006 10:31:25 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

&#8362 David Pescod's Late Edition July 5, 2006 SUNCOR ENERGY (T-SU) $93.18 +0.23 CRUDE OIL $75.20 +1.26 It’s always interesting to read what other people are thinking, particularly those that over time, have acquired a large following. One deep thinker out there that has a lot of admirers is David Rosenberg who is the chief North American economist with Merrill Lynch based out of New York. The one sector he is looking at right now, which could dampen both the economy and ultimately interest rates, is the unsold inventories of homes and condominiums according to a Bloomberg article today that follows Rosenberg’s writings. The chart on the left hand side shows that over the last five years - the price of the average condo has faired so well until recently when it has actually headed down a tad. The other line that has been steeply heading up only recently is the inventory of unsold condos, which needless to say is not a good sign for the housing industry. In Rosenberg’s latest writing, he is quoted as saying “The 11 percent slide in new home sales so far this year has far exceeded the 3.3 percent drop in new starts, suggesting that the backlog of unsold inventories is likely to rise even further.” He is advocating the purchase of treasury notes in anticipation of lower yields as the housing market slows along with the economy as a whole. Meanwhile, Boone Pickens, the legendary oilman also with a big following was on CNBC today and one of his picks was Suncor Energy. While admitting that he might also be short some E&P companies. He predicts that he expects to see $80.00 crude oil by the beginning of next year. The chart shows you how much fun Suncor and some other of the oil sands companies have had over the last two and three years. Which gets us to the good people at Genuity Capital Markets who after the CAPP Conference are warning “The risk to oil sands capital costs may be higher than previously expected.” And they point to presentations at last months CAPP Conference and follow-up conversations that has made the folks at Genuity more concerned about capital costs of oil sands projects, particularly the fully integrated projects. ANDERSON ENERGY (T-AXL) $ 5.00 -0.10 We had done a chart on Anderson Energy just a while ago to give an example of the disparity between some oil and gas companies these days—with some of the pure oil plays doing quite well, while some of the more “gassy” companies such as Anderson Energy, Delphi Energy (DEE) or Compton Petroleum (CMT) have suffered because of this huge current disparity between gas and oil prices. Gas, which usually trades at about a one to six ratio with oil, is now trading at about double that. If that isn’t enough to worry about for Anderson shareholders, today comes news about a fire at Focus Energy Trust Sylvan Lake gas plant in Southern Alberta. “They are still investigating the cause of the explosion and no updates yet as to the damage or timing of repair” suggests Canaccord analyst Martin Pelletier, but it looks like Anderson has approximately 6 million cubic feet a day or 20% of its current volume affected by the fire. Needless to say, this could affect Anderson’s financial performance negatively. In case you weren’t aware of all the risks that are involved in speculating or investing in oil and gas stocks, they again remunerated them…. 1) Trading liquidity risk 2) Geological engineering, regulatory and environmental risks related to the exploration for and development of crude oil and natural gas resources 3) Volatility in crude oil and natural gas prices that can materially affect financial performance and the accuracy of estimates. And then there is always whatever comes out of left field!