Ander's Market Theories

[lentinman]

Ander:

He is really good!

"The hurricanes hit and took out a sizable chunk of our crude, natural gas, and refined products production. Yet ever since then, supplies and inventories of most products have been climbing. Why? I for one have been lighting a fire in the wood stove every night for more than a month now. My natural gas furnace only kicks on sporadically. It would be running almost constantly otherwise. Up here in the mountains it’s been below freezing most nights for a quite a while now. I’ve also been driving a used car that gets decent gas mileage more often than my beloved old jacked up full-size Jimmy. Am I the only one that’s made an effort to conserve? Obviously, I am not. It’s showing up in the data every week."

I've tried telling people ever since Katrina that demand was going to slow, while production (because of the high prices) was going to rise. Inevitably, that can only lead to one thing - lower prices - possibly considerably lower prices.

I'm another example of the demand destruction. Almost every night for 2 weeks it has gotten to 30 something degrees at night and maybe around 60 average during the day. But, there is a lot of heat that comes in from the sun during the day. I have an electric heater that I turn on in my bedroom at night. What does this mean for NG? In my case it means I have yet to flip my thermostat to "heat". I haven't used one millionth of a cubic inch of it.

Today I noticed that my NG bill runs through the 27th (today). So, my October bill will be nill. Last year, I used 3 MCF's in October, this year zero. Last year I used 5 MCF's in November. My goal is to use 2 this year.

So, I'm at Wal-Mart a couple hours ago and I sees me another small electric heater and I thinks to meself that I can save more MCF's all winter for an investment of $17. Since I spend 98% of my time either in the Master Bedroom or in my study, I now have an electric heater in both.

I used 10.7 MFC's in December, 13.3 in January, 8.6 in February and 7.7 in March. So, from October through March, I used 47.3 MCF's. The average price of an MCF last winter was around $8. If it is $12 this year, I only need to use 67% of the MCF's to pay the same amount of money. That means I need to use 32 MCF's through March. My goal is half (24). But, even if I use 32, that is farrrrr less demand than the previous year.

Who is going to use more?? Nobody. But, there are a lot of people (and businesses) that will use less!

Len