i actually started writing this on thursday.  got distracted and left late 
morning to go to Vail.  Apparently I missed a little craziness.  My point on 
v/x is that forward spreads, months 3/4 and back, don't necessarily trade on 
value, they trade on drawing a forward curve that makes equilibrium between 
hedging and spec demand.  Look at k/m... do you think k cash will average 3 
cents above m.  i don't really see that scenario.  yet that's what it is 
worth because the market says jv is worth $x and to get there k/m=3.  The 
same argument applies to v/x.  i think this summer will be exceptionally 
strong as we try to inject 2 bcf/d more gas than last year.  But cal 2 will 
lag the move.  It's the main thing customers are selling right now because 
every equity analyst and even Pira are telling their customers that cal 2 
will average 3.50.  so either the v/x and x/z spreads come in or f/g g/h h/j 
blow out.  After this winter, who in there right mind wants to buy f/g or g/h 
again.  my thought is that the primary juice will be h/j but v/x and x/z will 
be under some pressure.  i'm a seller at 9 and buyer at 5-6.  Not much in it 
either way though.  




slafontaine@globalp.com on 01/31/2001 04:47:22 PM
To: John.Arnold@enron.com
cc:  
Subject: Re: v/x



you got me wrong-i wanna sell oct buy nov forward. look-two scenarios med 
longer
term. we inject like mad early summer-economy stays crappy the frot of the 
curve
gets slaughtered.-oct/nov goes to 3 cts sometime between now and end sep
   scenario 2-they dont enject what they want-oct /nov wil stay tite between 
say
3-and 10 cts like this year but man after this winter they will panic at some
point and buy the hell out of the winter strip and blow out oct /nov to 30 cts
cuz they panic. to me if that one was to ever backwardate it was this 
summer-low
low stx and injections and they still blew out cuz they panicked about 
winter-as
we see this winter now for good reason..?? capeche? i thinkit a win win

 you still in the damn mar/apr-i only sold a little prenumber-cant beleive how
this got killed after-what changed?? from 1:30 to 2:05




John.Arnold@enron.com on 01/31/2001 05:41:45 PM

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





quit pressuring them    i want to sell some too.  actually sold a few at 9
on the close




slafontaine@globalp.com on 01/31/2001 12:40:07 PM

To:   John.Arnold@enron.com
cc:
Subject:  Re: v/x



i hate hate that sprd-at 8 cts i think its such a good bearsprd-hope it
keeps
coming in. ill tell you why later