confused... what are you disagreeing with me in regards to demand destruction?


From: Jennifer Fraser/ENRON@enronXgate on 03/07/2001 08:55 AM
To: John Arnold/HOU/ECT@ECT
cc:  
Subject: rebuttal

I am definitely a bigger fan of the crude complex for the next few months. 
Agree the defcon 5 bubble has burst for natgas. Disagree about the demand 
destruction. 
? I think some demand is just permanently gone ( i.3. cheaper BTUs in ASIA- 
Pacific and plants just wont run here anymore). But I think that we are 
underestimating the structural changes in energy demand. Just as the economy 
is less dependent on heavy industry for its health, energy demand is 
changing. Since just about everyone missed the boat on the increased power 
demand as a result of  Silicon Valley, I think we don't have a good handle on 
what the drivers of the new power generation really are.So what i'm saying 
is  that industrial demand will weaken, demand in service based industries 
will increase. Also energy is a much smaller component of the cost structure 
in service industries.
? Also I think in 2000, people had sticker shock-- they couldn't have 
imagined 10$ gas, but now that volatility and higher prices are firmly 
entrenched in their minds --- they will find ways of running their factories. 
Also they will  budget for these prices instead of $2.50
? See NG Week (3/5/01) Nevada power price hikes affecting casinos --- 
increases of 20%. When asked the implication for missed earnings and their 
plans for demand conservation, one casino official replied 'We're in the 
bright lights business'
? I don't believe the economic doom and gloom
 First of all no one wants a repeat of the 1990 recession ( which was much 
worse outside of the US) Every central bank in the G7 has or will cut rates 
this week. The US will follow suit or it will have a very expensive dollar 
which will blow exports. With all of the monetary slack, consumer credit will 
not tighten and thus buying will continue ( witness the lack of destruction 
in big ticket items purchasing). Heavy manufacturing is contracting but this 
is not everything. Productivity gains are strong. The economy is becoming 
more service based and traditional industrial barometers are not telling the 
whole story.
? Finally, I am London and it is not doom and gloom over here.

well there's my 2 cents.

Jen Fraser
Enron Global Markets Fundamentals
713-853-4759

 -----Original Message-----
From:  Arnold, John  
Sent: Wednesday, March 07, 2001 2:31 PM
To: Fraser, Jennifer
Subject: RE:

i think jv strip prices to where we price out enough demand to get to 2.8.  
whther that price level is 425 or 725 is arguable.  i think it's close to 
here.  but when we get to november and we have 2.8 and don;'t repeat the 
weather of this past winter and we have 2.5 bcf more supply and people 
realize that we have 2.3 bcf to withdraw before there are any 
problems...bombs away.  


From: Jennifer Fraser/ENRON@enronXgate on 03/07/2001 01:00 AM
To: John Arnold/HOU/ECT@ECT
cc:  
Subject: RE: 

Why do you think nov mar is worth $3.75? 
Also whats your schedule looking like next week----care to meet for a 
beverage?

Jen Fraser
Enron Global Markets Fundamentals
713-853-4759

 -----Original Message-----
From:  Arnold, John  
Sent: Tuesday, March 06, 2001 5:03 PM
To: Fraser, Jennifer
Subject: Re:

  What it's trading  what I think it's really worth 
apr oct   540    500 
nov mar 547    375
cal 2  491    400
cal 3   460    325

Obviously most bearish the further out you go.  However, the game right now 
is not sell and hold...although it will be soon.  The game is where will it 
be tomorrow and next week and next month.  The market is structurally short 
term gas thanks to our friends from california.  where ca is buying power, 
williams and calpine and dynegy dont care of the gas costs 450 or 475 or 500 
or 525.  irrelevant.  so term is not going down in the short term unless the 
front comes into the 400's and scares some producers to start hedging or we 
or el paso can find fixed price lng to the tune of 250,000 a day for 10 years.



From: Jennifer Fraser/ENRON@enronXgate on 03/06/2001 10:37 AM
To: John Arnold/HOU/ECT@ECT
cc:  
Subject: 

what are your thoughts on

ap-oct
nov-mar
02
03


price levels and outlooks
 thanks
Jen Fraser
713-853-4759