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