a couple of observations from here:
cash/futures getting whacked.  whereas last weekend cash traded $1 over G, 
this weekend will probably trade $.15 over.  the lack of weather giving the 
market time to regroup.  good thing because another week of cold and the 
system was going to break.   certainly still has that chance in feb.  saw 
utilities recently staying on a verystrict withdrawal schedule and meeting 
any extra demand through spot market.  in effect, they said we're not 
withdrawing anymore so we'll buy marketers storage.  they had to encourage 
marketers to sell it to them, so cash was extremely strong in periods of even 
normal demand and should continue to be if/when any weather comes again.  
this week demand so low that utilities can meet demand without buying much in 
mkt.  g/h getting whacked in sympathy.  
probably priced 25 term deals through broker market  and own originators in 
past two days.  24 were from the buy side.  it's as if pira came in and told 
everyone term was cheap.  however, they've got the opposite view.  customers 
just seeing gas at $4 anytime as being okay now.  don't see any let up in 
back support for a while.  
front spreads the hardest call right now.  g/h h/j j/k ??? can't decide what 
to do with them and from the volatility in them, appears neither can anybody 
else.  almost think best play is taking feb gas daily against march, hoping 
for a cold spell that breaks the system and get a couple $20+ prints in 
cash.  probably as likely to happen in g as h and g/h has much less 
downside.  

doing well here.  actually having the best month ever 11 days in.  played 
front short against term length.  got out of front shorts today.   probably 
early but gas has a history of getting off the canvas when least expected.  
will keep term length meanwhile.   i've hated summer backwardation forever.  
agree about u/h.  a little less crazy about  the trade now because i think 
the easy money was made over the past two days.  unbelievable spec demand for 
next winter over past week kept summer winter spread constant on rally up and 
crushed on move down.  jv/xh went from 22 to 3.5 in 5 days while front 
virtually unchanged.

don't know what to think of this summer longer term.  certainly not as easy 
as it was last summer when it was obvious $3 was not equilibrium for gas.  
now $6 for this summer, i don't know.  we're gonna have to inject the hell 
out of gas and keep some demand priced out for a long time.  but we will feel 
production increase hit the market.  just buy vol.




slafontaine@globalp.com on 01/11/2001 04:48:32 PM
To: slafontaine@globalp.com
cc: jarnold@enron.com 
Subject: Re: ngas and economy



im getting really bullish mar/may-deliverabulty ayt these propective stx gonna
be hampered big time-thyre expensive but im not sure the mkt has a feeling for
what gas can do yet with normal weather and implications on the economy-as a
real estate owner getting a little scared. ngas is going to wreck morot 
gasoline
now-watch it go next then maybe heating oil

you doing alrite?