Managing Editor

Oil Analysts' Forecasting Average (1-for-4) Holds

Jet fuel is kerosene, not a fuel oil like heating oil or diesel, so its not counted in the distillate fuel category. Jet fuel is indeed down. By 9.2% year over year, in fact.

As for the crude oil/natural gas spead, you said "Nat. Gas has gone down approximately the same amount from its peak as has crude, just because it is closer means squat."

If you want to compare oil and gas on a dollar-for-dollar basis, that can't be true.

In September, the ratio was 15-to-1 in oil's favor. The ratio, as you point oit, now about 10-to-1. That means oil's premium has diminished. And that DOES mean something. Specifically, it means it was profitable to buy natural gas while selling crude over the past couple of months.

If your statement: "The old BTU generation equation of 6-8 times nat gas puts crude in the $40 to 52 range or some 30% lower than crude's current price." is a forecast, then remaining long gas/short oil would be warranted.

Oil Analysts' Forecasting Average (1-for-4) Holds

Keep in mind that the oil analysts reference in this report are NOT EIA employees, but representative of sellside (brokerage) firms and research organizations.

With that in mind, it's probably better to inquire into the credibility of these prognosticators.

More Off-Base (Way Off-Base) Oil Forecasts

Not oil price predictions. Not even too high or too low. Just that consensus expectations of production and suppliy are notoriously inaccurate.

In recent weeks, the best Oil Patch prognostications have been 1-for-4 (oil stocks, gasoline and distillate inventories and refinery utilization).

The predicitions are made on the eve of the weekly EIA report's release. They're simply not good guideposts for trading.

More Off-Base (Way Off-Base) Oil Forecasts

Pautaut -

If you don't follow the numbers, you also don't follow the trends.

These numbers aren't isolated one-offs. They're the continuation of a trend that began before Ike was spawned.

Powerful Strengths, Pathetic Weaknesses, and What Donald Coxe Recommends

An easily calculated metric for assessing monetary inflation can be found in the Hard Assets Investor article, "Computing Inflation In Real Time" at www.hardassetsinvestor....

How Natural Gas and Oil Prices Are Linked

The seasonal shrinkage of the crude oil premium to natural gas is already under way. Since Labor Day, the spread's narrowed $1.557 per mmBTU, or 16%. That would yield a $9,590, or 63%, return on margin for a 1:1 spread (long NG/Short CL).

See the Hard Assset Investor article, "Spreading Oil And Natural Gas" at www.hardassetsinvestor... for details.

Time To Consider Oil's Homely Cousin, Natural Gas

Look here at the HardAssetsIinvestor.co... article, "Spreading Oil and Natural Gas" (www.hardassetsinvestor...) for details on the seasonality of the crude oil/natural gas price relationship.

A one-contract spread (long natural gas/short crude oil) put on after the Labor Day break had gained 35% as of Friday's close.