Commodities Covered

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(No Transcript)
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Commodities Covered

• US Natural Gas
• US Electricity
• Global Crude Oil
• US Diesel

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• Natural Gas

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Price History
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US Production Pullback
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Canada Production Decline to Continue
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Global LNG Supply to Increase in 2009
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Weather-Driven Heating Demand
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Gas-Fired Generation Capacity Growth
2009 EIA Estimates
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Recession Hinders Industrial Activity
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US Natural Gas Price Forecast
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• Electric Power

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Power Generation by Source
Texas
California
New York
PJM
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Northern California 2009 Forwards
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ERCOT 2009 On-Peak Wholesale Forwards
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New York Zone J 2009 On-Peak Forwards
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PJM (PA-NJ-MD) 2009 On-Peak Forwards
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• Crude Oil

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Price History
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OECD Demand Plummets
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China Signals Non-OECD Weakness
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Non-Opec Supply Growth Struggles
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Opec Cuts Aggressively
Bloomberg Data
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Strong US Crude Oil Stock Position
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Crude Oil Price Forecast
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• Diesel Fuel

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Where to Watch
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Decoupling Falls Apart - China
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Chinese Diesel Demand Falters
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Has China Stabilized?
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Still Awaiting the US Turnaround
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Demand Growth Depends on Econ Recovery
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Retail Diesel Price Forecast
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Overview

• The deteriorating economy has reduced the demand
  outlook for natural gas, particularly by the
  industrial sector. Weak pricing and tighter
  credit conditions have reduced the supply
  outlook. As a result, the supply/demand balance
  is expected to be tight, providing support to
  prices from currently weak levels.
• Look for most deregulated power markets to
  largely follow the natural gas market, although
  some regional nuances could drive prices for
  short periods of time near settlement.
• The global recession is weighing heavily on
  global oil demand and prices. Low prices create
  a challenging environment for supply development,
  however, which sets the stage for a strong price
  recovery when demand returns.
• Global diesel prices will continue to perform
  poorly as long as the global economy is in a
  tailspin. Once economic growth stabilizes, we
  expect the market to begin to recover in fairly
  short order.

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• Tim Statts
• Vice President, Risk Management
• tstatts_at_summitenergy.com
• www.summitenergy.com
• 502.753.3148