industrial demand the scary thing.  no question there are some steel mills 
and auto factories and plastics plants that were on last november that arent 
coming up now and its not due to gas prices.  the economy sucks and it will 
affect ind demand.




slafontaine@globalp.com on 02/28/2001 08:03:43 AM
To: John.Arnold@enron.com
cc:  
Subject: Re: mkts



at least a myn dollars-need to talk to pira on that. excellant point. need to 
do
some margin analyses . having said all that look at corporate earnings from 
last
year to this year regardless of natgas costs as a feed industrials will be
running slower and consumers just now feeling the pinch as rate increases have
only just recently gotten approved and passed to the likes of us and people 
less
fortunate than us.





John.Arnold@enron.com on 02/27/2001 11:05:40 PM

To:   Steve LaFontaine/GlobalCo@GlobalCo
cc:
Fax to:
Subject:  Re: mkts





but that's my point.  the demand destruction roared its ugly head beginning
of Jan.  The price level was $9.  Of course there is a lag.  Let's make up
a lag time...say one month.   On Dec 1 cash was trading $6.70.  Probably a
similar lag on the way down.  Cash is $5.20 today.  How much lost demand
will there be in a month if we're still $5.2?   million dollar question if
you can answer that.




slafontaine@globalp.com on 02/27/2001 08:12:32 PM

To:   John.Arnold@enron.com
cc:
Subject:  Re: mkts



off the cuff i wud say tho same goes for 5.00 gas-currently 6-7 bcf/day
swing y
on y too much, to buy this level you need to take the view that industrial
america and residential and end users will be able to get back on their
feet and
recocover a lion share of the 4-4.5 bcf/d demand destruction(this assumes
as
current. very little if any dist fuel switching. i think the answer is
no-not
unless the economy was jump starter quickly-2nd q is gone,so maybe th 4q.
 remember the demand destruction and industrial shit really just started
only 6
weeks ago-me thinks it will take longer than that to get back into full
swing.
we all trade the y on y gap...all things remaining equal(ie term px for the
summer), starting april we'll have a surplus the other way by july barring
a
greenhouse in the ohio valley
    good to hear your view pt as always-even if it is wrong!!! ha






John.Arnold@enron.com on 02/27/2001 08:23:22 PM

To:   Steve LaFontaine/GlobalCo@GlobalCo
cc:
Fax to:
Subject:  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.