----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


.....NATGAS: While waiting for the Monday-night/Tuesday daily actuals to be posted, gas flows for last
.....week came in at 71 BCF. Not sure if the actuals will add or take-away from that (after the last 3 sets
.....of weekly actuals, its probably a 50/50 guess if actuals raise or lower that 71 BCF estimate), we shall
.....see tomarrow morning.

.....Longer-term model backed off just a tad on its bullishness on the weekend estimate. The modeling is
.....not expected to change much over the next 7 days, then is expected to trend more bullish.

.....Commitment of traders report last Friday showed commercial-shorts (E&P's), Small-specs, and Large-
.....specs all trending towards less-bearish / more-bullishness orientations, with only commercial-longs
.....trending less-bullish. This sees the continuation of a trend (since the end of February) where commercial-
.....shorts (E&P's) have bullishly reduced their futures hedges by more than 35,000 contracts while the
.....commercial-longs (LDC's) have bearishly reduced their futures hedges by more than 85,000 contracts.

.....The move to reduce hedging by E&P's is wise (their hedges protect against falling natgas), while the
.....reduction in hedging by LDC's (their hedges protect their residential customers from rising natgas) look
.....out-right foolish. Given that the same research is available to both, one could speculate that LDC's might
.....be trying to sandbag the markets... holding off on committing to futures (and not outbidding eachother
.....in the spot markets to fill storage).

.....Now, as I am more bullish on natgas than any analyst out there than I can think of (I can envision natgas
.....flirting with par-value to WTI in 18 months... which is $15+ today and may be $20+ then) I am concerned.
.....So concerned in fact that I sent off an email a couple weeks back to our local LDC (MICHCON) up here
.....where I live. So far no reply from their public-relations folks. None!

.....The axe overhanging the LNC's at the moment is the large difference between the positions of the large-
.....specs between oil (Long 267,151 contracts), and natgas (short 89,693 contracts), which likely reflects a
.....very-large collection of hedge-fund bets that oil outperforms natgas. The time is going to come when
.....that orientation flips the other way, and LDC's will be trapped. When that time comes, a lot of money will
.....be made by longs in futures (and especially longs in E&P's), and consumers of LDC's that sandbad (and
.....the economies of their service territories crushed).

.....(To anyone reading this from an LDC... just look at the drilling-rig counts today vs 3-years ago, then try to
.....think in the mentality of an E&P that, say if natgas goes to $6 while WTI stays at $90... will that E&P shift
.....their money away from prospecting for $90 oil to $6 natgas? $90 oil to $8 natgas? $90 oil to $10 natgas?
.....And shift in an environment where environmentalists are switching from an oil-is-evil to more of a natgas-
.....fracing-is-evil montra?)


.....OIL: Not as easy to figure oit oil as it is natgas. Refinery scheduling has fallen off big-time the last couple
.....of weeks, but that was not reflected in the weekly API/EIA numbers last week. From the gas-flows refinery
.....operation looks to have slowed.

....................................Refinery..........Hurricane
...................................Scheduling.....Disruptions
...................Day........... (MMCF)..........(MMCF)
...............09/01/12 (w)......387.................2937
...............09/02/12 (w)......393.................2503
...............09/03/12............410.................1738
...............09/04/12............415.................1309
...............09/05/12............453.................1157
...............09/06/12............468...................958
...............09/07/12............387...................847

...............09/08/12 (w)......396...................635
...............09/09/12 (w)......389...................397
...............09/10/12............379...................275
...............09/11/12............381...................213
...............09/12/12............343.......................0
...............09/13/12............352.......................0
...............09/14/12............343.......................0

...............09/15/12.(w)......365.......................0
...............09/16/12.(w)......345.......................0
...............09/17/12............358r......................0
...............09/18/12............319.......................0
...............09/19/12............323.......................0
...............09/20/12............350i......................0
...............09/21/12............362i......................0

...............09/22/12.(w)......336i......................0

...............(w) = weekend (Saturday/Sunday)



.....ECONOMICS & POLITICS: Food-group scheduling continues to suggest improving consumer
.....optimism while both the production and consumption indices are trying to stall. Overall, food-group
.....scheduling supports the economy unless or until something else (or someone else) grabbs the
.....publics attention. Third-quarter earnings look solid, revenues soft.

.....Todays economic (and political) numbers...

...............Weeklies.....Production........Consumption
...............07/14/12.............123.6.................153.3
...............07/21/12.............122.5.................149.6
...............07/28/12.............121.5.................149.6
...............08/04/12.............121.7.................150.7
...............08/11/12.............121.5.................147.4
...............08/18/12.............121.4.................145.5
...............08/25/12.............121.9.................142.0
...............09/01/12.............122.0.................142.1
...............09/08/12.............121.5.................147.9
...............09/15/12.............121.3.................150.2
...............09/22/12.............121.1.................149.7

.........................................---28 week avg---........---Daily (Raw)---......Daily
...............Dailies...............Prod'n.....Cons'n........Prod'n.....Cons'n......Food
...............08/24/12.............121.9.......142.7..........1.857.......31.07......44255
...............08/25/12.............122.0.......142.0..........1.877.......28.67......44255
...............08/26/12.............122.0.......141.4..........1.880.......28.67......45397
...............08/27/12.............121.9.......140.9..........1.867.......30.67......43590.......(RNC Opens night before)
...............08/28/12.............122.0.......140.4..........1.952.......31.14......42851.......(Ann Romney speaks night before)
...............08/29/12.............122.1.......140.0..........2.001.......31.92......41806.......(Paul Ryan speaks night before)
...............08/30/12.............122.0.......140.1..........1.881.......34.34......42176.......(Mitt Romney speaks night before)
...............08/31/12.............122.0.......140.8..........1.896.......35.81......42069
...............09/01/12.............122.0.......142.1..........1.877.......31.98......37486
...............09/02/12.............121.9.......143.2..........1.886.......31.98......36753
...............09/03/12.............121.8.......143.6..........1.884.......31.98......37357
...............09/04/12.............121.7.......144.1..........1.884.......32.07......37376.......(DNC Opens)
...............09/05/12.............121.7.......145.2..........1.927.......32.07......36240.......(Michelle Obama speaks night before)
...............09/06/12.............121.8.......146.4..........1.947.......32.07......36652.......(Bill Clinton speaks night before)
...............09/07/12.............121.7.......147.5..........1.885.......32.07......36464.......(Barack Obama speaks night before)
...............09/08/12.............121.5.......147.9..........1.874.......31.07......35981
...............09/09/12.............121.4.......148.1..........1.859.......31.07......36803
...............09/10/12.............121.2.......148.9..........1.872.......31.07......35996
...............09/11/12.............121.2.......149.0..........1.913.......31.07......38535.......(Middle East protests/violence erupt)
...............09/12/12.............121.2.......148.9..........1.927.......31.62......38962
...............09/13/12.............121.3.......149.3..........1.960.......31.59......39608
...............09/14/12.............121.3.......149.7..........1.918.......31.88......40061
...............09/15/12.............121.3.......150.2..........1.920.......32.68......41299
...............09/16/12.............121.2.......150.3..........1.867.......30.68......41072
...............09/17/12.............121.2.......150.4..........1.907.......32.93......33694
...............09/18/12.............121.0.......150.5..........1.845.......32.68......28614i
...............09/19/12.............120.8.......150.1..........1.871.......31.78i.....30053i
...............09/20/12.............120.8.......149.6..........1.918i......31.78i.....28631i
...............09/21/12.............121.0.......149.4..........1.971i......30.79i.....39416i
...............09/22/12.............121.1.......149.7..........1.932i......33.71i.....38215i
...............09/23/12................n/a...........n/a..............n/a..........n/a........35393i