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

To: Dennis Roth who wrote (178729)	6/4/2013 11:11:08 AM
From: Dennis Roth	2 Recommendations Read Replies (1) \| Respond to of 206165

E&P Stock Perspectives Per Underlying Commodity Price Drivers Bumping ’13 Natural Gas Price Outlook Following Much Colder- Than-Normal “Shoulder Season”; Gas Levered E&Ps To Benefit 30 May 2013 ¦ 90 pages ir.citi.com Raising 2013 Natural Gas Price Forecast to $3.90/MMBtu from $3.80/MMBtu... Following a much colder-than-normal April and May, we are raising our full-year composite spot natural gas price forecast to $3.90/MMBtu from $3.80/MMBtu. Our 2014 forecast remains $4.35/MMBtu. Weighted temperatures this past winter ended up matching the ten-year average after an extremely cold March, which was followed by a nearly 9% colder-than-normal April while temperatures so far in May have also deviated sharply from normal. Thus, “shoulder” period (April-May) natural gas demand is projected to be ~60 Bcf above normal, which largely underscores our slightly higher natural gas price outlook along with a corresponding and slightly higher outlook for CAPP coal prices. With summer kicking off next week, Citi’s Meteorological team still forecasts that summer temperatures (June-August), on average, will essentially match the ten-year average (see our May 9th note). Importantly, this equates to this summer being ~7% cooler than last year, which we project should result in ~70 Bcf less natural gas demand versus last summer, all else being equal. But coal-to-gas switching remains the effective “clearing mechanism” for excess supply, and we project coal-to- gas switching will average ~2.4 Bcf/d during the storage injection season this year versus ~7.3 Bcf/d last year (off a zero pre-2009 base). Our higher natural gas price forecast has the greatest benefit for the more natural gas-leveraged E&P stocks including Cabot, Encana, Ultra, Goodrich, Southwestern and Range (see Figure 12 for revised estimates).