|
|
Enron Mail |
so according to your analysis, had we been at $2.5 gas and we were not
bordering on a recession, we would have had the highest AGA number of recorded history for this week, last week, or next week by 15 bcf? seems a little far fetched to me. Our analysis is saying: gas at 2.50 we would have had 4.5 bcf a day more demand. that includes commercial residential industrial switching processing... as far as 2 bcf/d power gen demand- that counts the fact that last year was extremely mild versus expectation of normal summer this year, west will be running every gas unit virtually all hours as power demand is growing maybe 5% still and hydro way down. every molecule that can will flow west from waha this summer versus little last year. east power prices really havent reached point of priceing out demand and heat rates healthy enough to where gas can go up without raising power prices to cut demand. some concern of more efficient replacing less but hard to quantify. we're trying to build the stack now to estimate. frac margins now positive for all but most inefficient processors. will continue coming back. a little concerned about 2 oil prices. bordering right there now for places like florida and actually saw fl demand rise 100,000 last week as gas got to parity. let me look into inj capability. definitely bigger when field is empty from engineering standpoint so any problems really wont arise until fall when gen demand low and inj capacity lower...my initial thoughts. bo seems as neutral as everyone else in the market right now. really inactive. to clarify, not raging bull. i like everybody want to see what the inj numbers in april look like. nobody putting a position on until that starts to clarify. just think that hedging demand is making market a little short right now making next move up more likely. would be scale up seller though not really sure why cash trades at 10-15 back. doesnt make any sense. however as more fields start turning around throughout month, the stg arb to great in my opinion to keep spread there. must close one way or the other. notice that spread tightened to 6-8 towards end of trading friday? in general think that gas is reaching the elasticity stage right here. 50 cents lower and no switching, no processing, and gain back some demand. market needs to see some big stg numbers first. i think the best play right now is to start buying longer term put spreads. Jan 4/3.5 look great to me. if we get back to 2.8 and don't match last year's early weather, bombs away. slafontaine@globalp.com on 03/03/2001 07:03:14 AM To: jarnold@enron.com cc: Subject: friday this doesnt allow for new generation demand-which is unclear cuz it requires power px, also doesnt accrue for more eficient gen replacing inneficient, weather of course. but 2bcf/d sounds hi-esp shudnt happen until loads peak in july-shud be marginal in apr-jun if you notice im not alot diff than your guys-4.6 demand destruction is implied but im including a factor for R/C energy conservation-ie poor guys like me turning lites off and thermostat down-its making a difference- that will be less factor in shoulder demand months-reason why i think y on y s&d swing will be closer to 5 bcf apr-jun, if px doesnt fall and electricity spikes i think we'll see conservation return cuz i wont turn on my air cnditioner now rember the 7.4 is vs gas at sub 6.00 ie february which is approx where we are today all that being said yes some demand has come back-but it is as i consider extraordinary demand destruction-those things which never really have occured before-like the level for fuel switching in jan and fractionation margins(ie liquids) which were all non existent a year ago save for residual fuel. some ammonia/fert prod has come back as well. but when you get down to 2 -3 bcf/d industrial in the more i think of it-may not be destruction anymore as mucha unction of an economic slowdown. anyway -i think i only know two guys that are bearish-me and one of your big fund customers(ospraie). we'll see. is collins bullish as well-he seems quieter in the mkt lately. heres another one-what you guys think the industry capacity for injection is on a weekly basis? we sud test it...in other words if the max is say 105 then means the basis will uttery colpase on daily cuz mkt will keep futs too hi and be unable to inject all the gas available? thots also, you any idea why cash at the hub alway seems to hold a 10-15 ct discount lately daily vs next month futs? why not 5 or 30 cts? i dont get it bt wondering if its transportation or storage cost related. have a good weekdn my man ---------------------- Forwarded by Steve LaFontaine/GlobalCo on 03/03/2001 07:38 AM --------------------------- From: Steve LaFontaine on 03/01/2001 05:01 PM To: sulliacd@bc.edu, Terry Sullivan/GlobalCo@GlobalCo cc: Fax to: Subject: friday i think you are done with hhd/cdd stuff -ie did you complete the cdds vs utilites demand? also monthly hdds vs residential and commercial demand?(combined)?, cdds vs total stock change?? if all these are done add them to the summary sheet in usable formula form-ill show you what i mean then we start our price data base from bloom berg check this out-using the regression you did for nov-march 99/00 came to a draw of 155 with 195 gw hdds, i decreased the draw by the amount i beleive is the y on y supply demand swing. ie 1.5 bcf prod 1.1 bcf./d import 3 bcf/d industrial 1.16 fuel switching .5 ngl neg processing 1.3 r/c conservation --------------------------------- =7.4* 7=103 aga came in at 101, so excellant, back testing vs the week prior cam to 81, vs aga 81!!! nt bad-is a very bearish s&d is this continues cuz says injections will be enoromous in the spring
|