FMX | Connect – www.fmxconnect.com - (Reported 5/14/2010)
Responded to by one of the FMX Community members, an Energy Trader at a $500MM fund.
Transcribed IM:
FMX:Why are natgas inventories only 4% higher than last year when there are 30% more rigs working?pls explain
NG Trader: thats the wrong question
FMX: someone asked us
NG Trader: listen
FMX: well?
Ng Trader: Inventories is the result of a supply and demand equation that has 7 moving variables: production Canadian imports, LNG imports, Mexican exports, power demand, industrial demand heating demand and pipeline loss/demand
rigs have only to do with production
the question is...why is production setting new records ( it set a new all time high last week) when rigs are 50% below their high of 18 months ago.
FMX: because of horizontal drilling
right. the second question is: why are prices so high and so much higher this year, when inventories are 4% higher than last year and last year it was widely held view that armageddon had come to natural gas and inventories would be so full that prices would collapse to $1
another answer to your question is, how did inventories get 4% higher YOY after one of the coldest winters nationwide of the last 10 - 15 years, where we had record snow all across the deep south??
nat gas should be at least $1 dollar lower IMO.
FMX: thank you for that. testy bastard!
About FMX: FMX Connect is an information, data, and analytics portal for Commodities. The portal provides an all-in-one package including essential market data, independent third party research, industry news, and commodity trading tools. FMX Connect provides efficient, effective, and thorough data that bridges all aspects of commodities onto one screen. The Result; A user friendly application for hedge fund traders, OTC brokers, individual investors, and industry participants
-----
Note: The information presented, while from sources generally believed to be reliable, is not guaranteed and may not be complete. FMX | Connect makes no representations or warranties regarding the correctness of any opinions or information. Past results are not necessarily indicative of future results. Nothing in this report should be construed as a representation to buy or sell shares, futures or options, which contain considerable risks. For internal client distribution only. Any reproduction, re-transmission, or distribution of this report without permission is prohibited. Media correspondents or reporters may not quote any one page or section in its entirety and must attribute all quotes, ideas or concepts herein. Copyright FMX | Connect, ©2009-2010. All rights reserved.