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Enron Mail |
a couple of observations from here:
cash/futures getting whacked. whereas last weekend cash traded $1 over G, this weekend will probably trade $.15 over. the lack of weather giving the market time to regroup. good thing because another week of cold and the system was going to break. certainly still has that chance in feb. saw utilities recently staying on a verystrict withdrawal schedule and meeting any extra demand through spot market. in effect, they said we're not withdrawing anymore so we'll buy marketers storage. they had to encourage marketers to sell it to them, so cash was extremely strong in periods of even normal demand and should continue to be if/when any weather comes again. this week demand so low that utilities can meet demand without buying much in mkt. g/h getting whacked in sympathy. probably priced 25 term deals through broker market and own originators in past two days. 24 were from the buy side. it's as if pira came in and told everyone term was cheap. however, they've got the opposite view. customers just seeing gas at $4 anytime as being okay now. don't see any let up in back support for a while. front spreads the hardest call right now. g/h h/j j/k ??? can't decide what to do with them and from the volatility in them, appears neither can anybody else. almost think best play is taking feb gas daily against march, hoping for a cold spell that breaks the system and get a couple $20+ prints in cash. probably as likely to happen in g as h and g/h has much less downside. doing well here. actually having the best month ever 11 days in. played front short against term length. got out of front shorts today. probably early but gas has a history of getting off the canvas when least expected. will keep term length meanwhile. i've hated summer backwardation forever. agree about u/h. a little less crazy about the trade now because i think the easy money was made over the past two days. unbelievable spec demand for next winter over past week kept summer winter spread constant on rally up and crushed on move down. jv/xh went from 22 to 3.5 in 5 days while front virtually unchanged. don't know what to think of this summer longer term. certainly not as easy as it was last summer when it was obvious $3 was not equilibrium for gas. now $6 for this summer, i don't know. we're gonna have to inject the hell out of gas and keep some demand priced out for a long time. but we will feel production increase hit the market. just buy vol. slafontaine@globalp.com on 01/11/2001 04:48:32 PM To: slafontaine@globalp.com cc: jarnold@enron.com Subject: Re: ngas and economy im getting really bullish mar/may-deliverabulty ayt these propective stx gonna be hampered big time-thyre expensive but im not sure the mkt has a feeling for what gas can do yet with normal weather and implications on the economy-as a real estate owner getting a little scared. ngas is going to wreck morot gasoline now-watch it go next then maybe heating oil you doing alrite?
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