Re: mkts

Good to hear from you.
After a great F, had an okay G. Held a lot of term length on the risk/reward
play. Figured if we got no weather, all the customer and generator buying
would be my stop. It was. Amazing that for the drop in price in H, the
strips have really gone nowhere. just a big chop fest.
i here your arguments, but think they are way exagerated. Agree with 1.5-2
bcf/d more supply. Call it 2 with LNG. Imports from Canada should be
negligible. Now let's assume price for the summer is $4. No switching, full
liquids extraction, methanol and fertilizer running. Electric generation
demand, considering problems in west and very low hydro, around 1.5 bcf/d
greater this year with normal weather. Means you have to price 2 bcf/d out
of market. Don't think $4 does that. What level did we start really losing
demand last year? It was higher than 4. concerned about recession in
industrial sector thats occuring right now.
Think gas is fairly valued here. Dont think we're going to 7. But I think
fear of market considering what happened this past year will keep forward
curve very well supported through spring. we're already into storage
economics so the front goes where the forward curve wants to go.

slafontaine@globalp.com on 02/26/2001 04:48:06 PM
To: jarnold@enron.com
cc:
Subject: mkts

its been a while-hope all is well. not a great few weeks for me in ngas-not
awful just nothing really working for me and as you know got in front of
march/apr a cupla times, no disasters.
well im bearish-i hate to be so after a 4 buck drop but as i said a month
ago
to you-and now pira coming around. 5.00 gas is a disaster for the natgas
demand.
now production up strongly y on y...you guys agree on the production side?
i know youve been bullish the summer-think im stll in the minority-but here
you go, we have y on y supplly up 2/bcf+ demnad loss 3.5bcf/d, 5.5 bcf/day y
on
y swing . then i submit as we started to see due huge rate increases R/C
demandd
energy conservation will be even more dramatic this summer which will effect
utilty demand/power demand ulitmately. if pira rite we lost 1.56 in jan for
this factor i say it cud be bigger this summer as ute loads increase, power
pxes
rise and consumers become poorer. there will be more demand flexibilty in the
summer part in the midcon and north as AC is more of a luxury item than heat.
i
say 5-6% lower use in residentail/utilty power consumption due rationing is
another .7/1bcf/d loss.
put all this together we wud build an addional 1284 apr thru oct on top of
last years 1715 build basis last year temps and todays prices. takes us to
3.6
tcf or so. what am i missing my man-summer has to go to 4 bucks or lower to
restore demand??? thots.

as far as that other thing, the p&c its still alive, shud know more soon and
ill
keep you posted.