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

To: Frank who wrote (75616)	11/28/2006 7:23:55 AM
From: Ed Ajootian	Respond to of 206136

Frank, another classic, thanks as always. To elaborate on point #1 a little, I place a lot of significance on the big Y-O-Y reduction in gas-directed rigs in Canada that has occurred since around mid-September. To turn an old adage on its head, "the cure for low prices is low prices". We knew this should apply to North American natty prices at some point, but we (or at least I) weren't (wasn't) sure what "low prices" meant. Looking back at the recent price of the near-month Nymex contract, oilnergy.com , it looks like the ~ 3 month stretch during mid-May to July, during much of which the price wallowed in the $6 range, was what turned the trick on getting the Canadians to lay down their rigs. The fact that the Canadians reduced their drilling for gas at Nymex $6 is significant. This is strong evidence that $6 is the bottom for natty prices.