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To: Ed Ajootian who wrote (99863)	4/26/2008 3:11:46 PM
From: quehubo	Read Replies (1) \| Respond to of 206131

Ed, you may recall many weeks ago I predicted $10-12 on the 12 months strip when I estimated 1,200~ bcf storage for the low. I also predict we fill storage to 3,500 bcf by November 1, without an extreme Summer and without major hurricane impact. I believe $10-12 NG will destroy enough demand to make it happen. If I am wrong we will have $15-20 NG next Winter competing with heating oil because the market will not take lightly starting the Winter at <3,300 bcf. A normal Summer without hurricane impact and we get to start all over from 3,500+. Dont forget there is allot of new storage being built this year that needs to be filled.

To: Ed Ajootian who wrote (99863)	4/26/2008 3:37:41 PM
From: tradingfaster123	Read Replies (2) \| Respond to of 206131

IMO you and quehubo have it right. A normal winter will pull approximately 2324bcf from storage. This past winter there was a 2261 pull. So NG goes to whatever price it takes to achieve 3500 or so by the end of the injection period. If that level isn't achieved, there is a huge risk of prices going parabolic if the next winter is cold (or even normal). On your other point about whether a short-term spike or not, it looks like 10-11+ is unsustainable as things stand now. There is a small dislocation happening right now because this is the first decent winter in five years. But we have to look at how supply/demand is evolving excluding weather to get a true picture of where NG stands. And ex-weather, supply is clearly overtaking demand. LNG prices don't matter going forward because there is no LNG export capacity away from the U.S. Think about what happens in 2009 if supply grows 4bcfpd again. There will be no yoy hit from LNG regardless of world supply/demand because we are already at such a low level. Either demand grows 4bcfpd or prices come down. The only reliable growth in demand has been 1.4bcfpd in generation. Already the injections are showing up as at least 1bcfpd over last year adjusted for weather and independence hub outage. May will be the best month to see where we stand. And another thing to think about is if the LNG trend reverses once again. Every report I have read points to enormous supply growth in this area during 2009, but especially 2010. For example w/w LNG supply grows 0.9bcfpd this year, after 2.4bcfpd growth in 2007. But is expected to grow 3.5bcfpd in 2009 and 5.5bcfpd in 2010. Also, don't count out LNG imports going up in the next couple months due to paltry amount of storage capacity around the world. For example, 149bcf in UK/Belgium, 258bcf in Japan, 119bcf in Korea, etc. Compared to 3600+ for U.S. Message 23883794