-----Original Message-----
From: 	"Jack Belcher - Exchange" <jbelcher@chemweek.com>@ENRON [mailto:IMCEANOTES-+22Jack+20Belcher+20-+20Exchange+22+20+3Cjbelcher+40chemweek+2Ecom+3E+40ENRON@ENRON.com] 
Sent:	Thursday, May 17, 2001 3:23 PM
To:	steve blalock; Spencer Kelly; Nick Snow; Mary Aucoin; Karl Lang; Doug Gill; David Sweet; Parks, Joe
Subject:	Fw: Email from Adam Sieminski -- US Natural Gas Inventories Rise Relentlessly


----- Original Message -----
From: <jay.saunders@db.com>
Sent: Thursday, May 17, 2001 4:06 PM
Subject: Email from Adam Sieminski -- US Natural Gas Inventories Rise
Relentlessly


> Last week's 119 bcf injection into U.S. natural gas storage - the largest
> weekly injection since mid-June 1994 - leaves current storage of 1.077 tcf
> only 86 bcf below last year and 40 bcf from the middle of the 1994-1999
> range. Based on seasonal patterns, large injections should continue over
the
> next nine weeks, when storage increases are typically the largest of the
> year. So far this injection season, inventories have risen 450 bcf, or
100%
> faster than the typical rate of 220 over the first six weeks of the refill
> season. If inventories rise only half that rate, at 50% faster than the
> norm, storage would pass the middle of the typical range next week and end
> October at nearly 3 tcf, or 120 bcf from the top of the range.
>
> While our projected inventory injections seem bearish, we still look for
> relatively strong price support above $4/mmBtu through the year. Even with
> inventories rising quickly, there seems to be genuine concern for the need
> to satisfy summer demand for electricity (air conditioning), especially in
> the Southwest U.S. By the end of the year, however, we expect inventory
> coverage of forward demand to be on par with normal levels.
>
> While we continue to feel that demand has been a major contributor to the
> large storage injections, supply also seems to be playing a stronger role.
> Reported DOE growth of 3% in 2000, which comes with a one percentage point
> room for error due to data imperfections, comes mostly from Texas and
> Wyoming. From Canada, higher than expected production from Alberta, in
> addition to the eastern offshore, seems to have influenced the large
> shipments to the U.S. Contrary to expectation, the Alliance pipeline has
> been running at 1.5 bcf/d capacity - and often beyond - since its
> commencement last November.
>
>  <<gas inventory 0517.pdf>>
>
> ADDITIONAL INFORMATION AVAILABLE UPON REQUEST
>
> Jay Saunders
> Deutsche Banc Alex. Brown Inc.
> 1 South Street  BAL01-1628
> Baltimore, MD   21202
> Office:  410-895-3341     Fax:   410-895-3202
> Mobile: 443-794-4183
> E-mail: jay.saunders@db.com
>
>
> Information herein is believed to be reliable and has been obtained from
> sources believed to be reliable, but its accuracy and completeness cannot
be
> guaranteed. Opinions, estimates, and projections constitute our judgement
> and are subject to change without notice. This material is provided to you
> for information purposes only and is not intended as an offer or
> solicitation for the sale of any financial instrument. Deutsche Banc Alex.
> Brown Inc. and its affiliates worldwide may hold a position or act as
market
> maker in the financial instruments of any issuer discussed herein or act
as
> an advisor or lender to such issuer. Transactions should be executed
through
> a Deutsche Bank entity in the client's home jurisdiction unless otherwise
> permitted by law. Deutsche Banc Alex. Brown Inc. is a member of the NYSE
and
> NASD.  Copyright 2001 Deutsche Banc Alex. Brown Inc.
>
>
>

 - gas inventory 0517.pdf