Capitol Area Energy, Inc.

, October 3, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for November on the NYMEX tumbled $ 0.523 lower yesterday to settle at $ 6.835 per MMBtu, falling for a 3rd straight day its lowest price in almost a year as investors flee commodities on concern a widening financial crisis will further slow the economy, cutting energy demand. The intra-day low was the lowest price since October 2007. Energy commodities fell Monday as the DJIA dropped below 10,000 for the time since October 2004, driven lower by financial woes in Europe and concerns that the ill-advised $ 850 billion Wall Street bailout will do nothing to solve the problem. A financial meltdown is cutting demand for energy commodities and sending investors into perceived safer havens, such as gold and Treasury notes, analysts said. Forecasts of mild fall weather across much of the nation over the next 2 weeks is also placing downward pressure on prices. The NWS is predicting normal temperatures across the eastern half of the US for next week. Last week, the EIA reported a storage injection of 87 Bcf, more than expected, compared to an injection of 62 Bcf a year ago. The report showed that total storage levels of 3.11 Tcf are now 50 Bcf above the 5-year average. For this week, look for an injection of about 70 to 80 Bcf. For this week, major resistance is seen at $ 9.430, with minor at $ 6.955, while major support is seen at $ 5.250 and minor at $ 6.820.
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX November 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.84 7.13 7.26 7.45 7.78 Change -0.52 -0.50 -0.46 -0.41 -0.37

SEPT. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 7.472 7.27 4.92

EIA GAS STORAGE
10.00 5.00 0.00

Region East West
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1855 423 832 3110

Change 51 12 24 87

Prod
2005 6.21 7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 8.32 7.17 2006 11.43 8.40 2007 5.84 6.92

Total

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

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By Grant Smith (Bloomberg) -- Crude oil rose for the first time in five days as an interest-rate cut in Australia triggered speculation that other central banks will ease policy to shore up economic growth. Oil also rose on speculation OPEC may trim output. The group, due to review production targets in December, will take ``appropriate measures'' to stabilize international markets, President Chakib Khelil said yesterday. It pared some of those gains as the U.K. government weighed a recovery plan for banks. ``We'll see more commitment from central banks that will help the market in the short term,'' said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. ``If prices fall to $80, the possibility of OPEC cutting before its December meeting increases.'' Crude oil for November delivery jumped as much as $3.27, or 3.7 percent, to $91.05 a barrel in electronic trading, and was at $89.50 at 9:37 a.m. London time on the New York Mercantile Exchange. Crude oil futures have declined 38 percent from the record $147.27 reached July 11. Yesterday, crude futures fell $6.07 to settle at $87.81 a barrel in New York. The contract touched $87.56, the lowest since Feb. 7, as the dollar rose against the euro, while OPEC chief Khelil said the price slide will continue next year. Arjun Murti, the Goldman Sachs Group Inc. analyst who predicted a crude ``super spike'' in March 2005, said there is a ``downside'' risk to his forecast that oil may rise to Goldman's forecast of $120 oil in the fourth-quarter.

Oil Rises for First Time in Five Days on Rate Cut Speculation

MCPE AVERAGE
ERCOT Houston North West Ave 52.37 45.47 45.84 50.32 Change 16.45 11.42 11.69 14.95

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Capitol Area Energy, Inc., October 10, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for November on the NYMEX rose $ 0.153 yesterday to settle at $ 6.688 per MMBtu, as governments in Europe, US and Asia took measures to support banks and restore confidence in economies and stock markets rose across the world. Natural gas, crude and other commodities advanced after the UK provided $ 64 billion of capital to its banks and the Federal Reserve said it will lend unlimited dollar funds to financial institutions. Natural gas futures have dropped 51% from a 30-month intra-day high of $ 13.694 on July 2nd. It plunged 11% last week. Stocks rallied worldwide as MSCI World Index rebounded from its worst week on record, and the euro rose the most in three weeks against the dollar after the banks worked to boost the financial system. Morgan Stanley climbed as much as 97% after the firm sealed its $ 9 billion investment from Mitsubishi UFJ Financial Group Inc. Industrial and commercial demand together accounted for 9.64 Tcf, or 42%, of natural gas consumption in the US last year. Last week, the EIA reported a storage injection of 88 Bcf, somewhat more than expected, compared to an injection of 68 Bcf a year ago. The report showed that total storage levels of 3.198 Tcf are now 69 Bcf above the 5-year average. For this week, look for an injection of about 70 to 80 Bcf. For this week, look for an injection of about 60 Bcf to 70 Bcf. For this week, major resistance is seen at $ 9.130, with minor at $ 6.745, while major support is seen at $ 5.250 and minor at $ 6.530.

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX November 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.69 7.02 7.15 7.32 7.63 Change 0.15 0.15 0.14 0.13 0.12

OCT. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Price 7.472 7.27 4.92

NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

Waha Hub

EIA GAS STORAGE
Region East West Prod
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1899 432 867 3198

Change 44 9 35 88

Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 8.32 7.17

2006 11.43 8.40 2007 5.84 6.92

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2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

Nana Getting Shear, More Possible Development
By AccuWeather Meteorologist Eric Reese - As of 5:00 a.m. EDT, Nana was located near 16.6 north and 39.3 west or about 1,015 miles west of the Cape Verde Islands. The storm is moving toward the west-northwest at about 7 mph, with this motion expected to continue over the next couple of days. Maximum-sustained winds are near 40 mph with higher gusts, while the estimated central pressure is 1005 mb or 29.68 inches. Strong, westerly shear across Nana has completely exposed the center of circulation and this shear is expected to weaken the storm over the next 24 hours, with Nana likely becoming a remnant low within the next day or two. Elsewhere in the Atlantic Basin, a tropical wave is located in the eastern Caribbean along 69 west is causing numerous showers and locally heavy thunderstorms over the Lesser Antilles northward into Puerto Rico. Lessening wind shear will allow this wave to become better organized on Monday. It may develop into a tropical depression within the next 12-24 hours. Wind shear could pick back up in the path of this feature on Tuesday and Wednesday across the northern Caribbean, so there may only be a small window of opportunity for strengthening. Regardless of whether this feature becomes a depression or even a tropical storm, it will bring flooding rain to the northern Caribbean including Puerto Rico and perhaps Hispaniola over the next several days as it treks slowly to the northwest.
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MCPE AVERAGE
ERCOT Houston North West South Ave 151.26 109.04 111.28 138.74 Change 99.07 80.91 82.57 93.70

Capitol Area Energy, Inc., October 17, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for November on the NYMEX rose $ 0.083 to settle at $ 6.786 per MMBtu, capping their biggest weekly gain in four months as utilities and industrial users sought supplies before demand picks up with cold weather. Below-normal temperatures are forecast from Texas to Massachusetts late this week, according to the 14-day outlook. Utilities and electricity generators are locking in these lower prices. Natural gas prices gained 3.8% last week, the biggest gain since the week ended June 6th. Prices declined in the previous three weeks, including an 11% drop the prior week, on concern demand would falter amid a slowing economy and the credit crisis. Forecasters are saying below-normal temperatures for November. Temperatures are expected to dip in Chicago starting this weekend with the overnight lows dipping to freezing. The average low is about 42 degrees. Natural gas has declined 50% from a 30-month closing high of $ 13.577 on July 3rd. Prices from last November through March advanced 21% and averaged $ 8.327. Prices a year earlier averaged $ 7.346. Last week, the EIA reported a storage injection of 79 Bcf, a little lower than expected, compared to an injection of 49 Bcf a year ago. The report showed that total storage levels of 3.277 Tcf are now 85 Bcf above the 5-year average. For this week, look for an injection of 60 to 70 Bcf. For this week, major resistance is seen at $ 8.730, with minor at $ 6.860, while major support is seen at $ 5.250 and minor at $ 6.680
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX November 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.74 6.98 7.06 7.17 7.45 Change -0.05 -0.08 -0.08 -0.07 -0.06

OCT. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 7.472 7.27 4.92

EIA GAS STORAGE
Region East West Prod
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1945 440 892 3277

Change 46 8 25 79

Total
2005 6.21 7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 8.32 7.17 2006 11.43 8.40 2007 5.84 6.92

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If you are interested in receiving electricity bids, simply complete our Letter of Authorization and fax it back to 512-266-4712. Click Here! LETTER OF AUTHORIZATION If you are currently under contract and would like notification of natural gas or electricity rates, please sign up to receive future prices. Click Here! NATURAL GAS & ELECTRICITY SIGN UP

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

US OIL INVENTORIES SURVEY: Oil, Gasoline Builds Expected
NEW YORK (Dow Jones)--U.S. crude oil stocks are forecasted to increase in data due Wednesday from the Department of Energy, according to a Dow Jones Newswires survey of analysts. The data, put out by the department's Energy Information Administration unit and covering the week ended Oct. 17, are due at 10:35 a.m. EDT Wednesday. Crude oil inventories are expected to rise 2.1 million barrels, according to the mean of eight analysts' forecasts. All but one expect a gain, with estimates ranging from a drawdown of 1.2 million barrels to a build of 3.75 million barrels. Gasoline inventories are seen growing by 2.4 million barrels, according to the analysts' average. Every analyst surveyed expects an increase, with predicted gains ranging between 1.5 million and 3.75 million barrels. Stocks of distillates, which include heating oil and diesel fuel, are expected to fall by 100,000 barrels. Four analysts see a decline, three a gain and one no change, with estimates ranging from a draw of 1 million barrels to a build of 900,000 barrels. Refinery use is seen rising 0.6 percentage points to 82.8% of capacity. Utilization is seen beginning to level off after several weeks of larger gains, as the Gulf Coast completes its recovery from two late-summer hurricanes. Utilization stood at 87.1% at this time last year, but refiners have cut runs in response to declining demand. "This week's report should reflect the 'tail end' of the effects from last month's supply disruptions related to Hurricanes Gustav and Ike," said Jim Ritterbusch, president of the trading advisory firm Ritterbusch & Associates in Galena, Ill.
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MCPE AVERAGE
ERCOT Houston North West South Ave 33.39 33.33 26.44 33.21 Change 14.40 21.46 21.99 16.52

Capitol Area Energy, Inc., October 24, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural futures for November on the NYMEX dropped $ 0.181 cents Friday to settle at $ 6.239 per MMBtu, falling along with crude oil and gasoline on concern demand for energy will decline as the world economy slows. About 40% of natural gas demand in the US originates with commercial and industrial consumers, who tend to cut back in times of economic weakness. Crude oil prices declined after OPEC’s decision to cut oil output 1.5 million bpd did little to shake the perception that there is more than enough oil to meet demand. Natural gas futures haven’t settled this low since September 21, 2007. Prices had the 4th weekly decline in the last 5 weeks and may test the $ 5.30 level from late August 2007. Economists at Deutsche Bank expect the Group of seven economies, which includes the US, to contract 1.1% next year. The slowing economy may push oil below $ 50 per barrel and that would drag natural gas much lower. US petroleum-fuel demand fell 8.5% last week from a year earlier, the EIA said. Last week, the EIA reported a storage injection of 70 Bcf, a bit lower than expected, compared to an injection of 60 Bcf a year ago. The report showed that total storage levels of 3.347 Tcf are now 93 Bcf above the 5-year average. For this week, look for an injection of 60 to 70 Bcf. For this week, major resistance is seen at $ 8.475, with minor at $ 6.330, while major support is seen at $ 5.250 and minor at $ 6.185.

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX November 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.24 6.48 6.61 6.80 7.15 Change -0.18 -0.16 -0.14 -0.12 -0.10

OCT. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Price 7.472 7.27 4.92

NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

Waha Hub

EIA GAS STORAGE
Region East West Prod
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1985 444 918 3347

Change 40 4 26 70

Total
2005 6.21 7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 8.32 7.17 2006 11.43 8.40 2007 5.84 6.92

◄ LINKS ►
If you are interested in receiving electricity bids, simply complete our Letter of Authorization and fax it back to 512-266-4712. Click Here! LETTER OF AUTHORIZATION If you are currently under contract and would like notification of natural gas or electricity rates, please sign up to receive future prices. Click Here! NATURAL GAS & ELECTRICITY SIGN UP

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

By Grant Smith and Yuji Okada-Oct. 27 (Bloomberg) -- Crude oil fell to its lowest since May 2007 in New York as plunging stock markets heightened concerns that a global recession will slash energy demand. OPEC, supplier of 40 percent of the world's crude, may need to make an additional production cut if its Oct. 24 decision to lower output fails to stabilize prices, Agence France-Presse said, citing an interview Iran's OPEC representative Mohammad Ali Khatibi gave on state television. ``Fear is the word,'' said Robert Laughlin, a senior broker with MF Global Ltd. in London. ``Concern about the depth of a global recession and the length of any recovery is now causing alarm across world markets.'' Crude oil for December delivery fell as much as $2.85, or 4.4 percent, to $61.30 a barrel in after-hours electronic trading on the New York Mercantile Exchange. That's the lowest since May 9, 2007. It was at $61.58 at 9 a.m. in London. Brent crude oil for December settlement fell as much as $3.03, or 4.9 percent, to $59.02 a barrel on London's ICE Futures Europe exchange. It traded at $59.51 at 9:10 a.m. local time. This is the lowest since Feb. 22, 2007. The MSCI World Index lost 3.1 percent to 844.82 at 8:27 in London, having shed more than a quarter of its value this month as subprime-related credit losses topped $680 billion. Hong Kong's Hang Seng Index sank 13 percent after money-market rates rose, and the Philippines' benchmark gauge plunged 12 percent, triggering a temporary trading halt. ``I expect prices are not likely to stop falling,'' said Go Endo, a Fuji Futures Co. commodity strategist in Tokyo. ``OPEC may not wait until the next meeting in December. They will probably hold an extraordinary meeting to cut production further.''
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Oil Falls to Lowest in 17 Months as Recession Fears Intensify

MCPE AVERAGE
ERCOT Houston North West South Ave 30.05 30.05 30.05 30.05 Change -7.45 -7.45 -7.45 -7.45

Capitol Area Energy, Inc., October 31, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for December on the NYMEX rose $ .0352 higher on Friday to close at $ 6.783 per MMBtu, ahead of the weekend. Above-normal temperatures will cover a swath of the nation from Minnesota to New York for much of this week. The warm weather may linger in the Northeast until November 12th. Canadian and US natural gas production will total about 70 Bcf per day from now through March, about 900 MMcf more than the same period a year earlier, Canada’s National Energy Board predicted in its winter outlook. The combination of weaker demand higher availability from production and storage suggests there will be sufficient supplies at lower prices this winter. Prospects for natural gas demand growth in 2009 area reduced as the economic slowdown will probably cut consumption, Barclays Capital said in a report last week. Last week, the EIA reported a storage injection of 46 Bcf, about what was expected, compared to an injection of 66 Bcf a year ago. The report showed that total storage levels of 3.393 Tcf are now 97 Bcf above the 5-year average. For this week, look for an injection of about 10 to 20 Bcf. For this week, major resistance is seen at $ 8.430, with minor at $ 6.875, while major support is seen at $ 6.350 and minor at $ 6.555.

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX December 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.78 6.98 7.00 7.21 7.50 Change 0.35 0.33 0.30 0.27 0.26

NOV. 2008 GAS PRICES
Point Price 6.469 5.72 3.43 NYMEX Houston Ship Channel Waha Hub

NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

EIA GAS STORAGE
Region East
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 2004 451 938 3393

Change 19 7 20 46

West Prod Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17

2006 11.43 8.40 2007 5.84 6.92

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

◄ LINKS ►
If you are interested in receiving electricity bids, simply complete our Letter of Authorization and fax it back to 512-266-4712. Click Here! LETTER OF AUTHORIZATION If you are currently under contract and would like notification of natural gas or electricity rates, please sign up to receive future prices. Click Here! NATURAL GAS & ELECTRICITY SIGN UP

Oil Falls as Asian Import Cuts Heighten Demand Slowdown

By Grant Smith, Nov. 3 (Bloomberg) -- Crude oil fell as reduced imports by Asian refiners reinforced concerns that a demand slowdown is spreading to emerging markets. China Petroleum & Chemical Corp., Asia's biggest refiner, will process less crude at some plants because of falling fuel demand, its parent said today. South Korea imported 1.4 percent less crude oil in October as the global credit crisis sent shockwaves through Asia's fourth-biggest economy. ``Demand growth in the emerging markets seems to be slowing down massively,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. ``The outlook is disturbingly weak and alarming for commodity traders and investors.'' Crude oil for December delivery dropped as much as $1.27, or 1.9 percent, to $66.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $67.06 a barrel at 10:16 a.m. London time. Oil climbed 5.7 percent last week, the first gain in five weeks, as the U.S. and China lowered interest rates to prop up economic growth. Crude has fallen 53 percent from its record $147.27 a barrel on July 11. The United Arab Emirates has notified customers that they will receive less crude as a result of OPEC's Oct. 24 resolution to cut production by 1.5 million barrels a day, Oil Minister Mohamed al-Hamli told reporters in Abu Dhabi today. Iran will cut crude oil sales to Total SA, Europe's third- largest oil company, by some 70,000 barrels per day, Iranian oil Minister Gholamhossein Nozari said on Nov. 2. Nigeria's national oil company announced shipment cuts of 5 percent in November and December last week.
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MCPE AVERAGE
ERCOT Houston North West South Ave 28.14 28.06 18.90 27.90 Change 1.47 1.54 9.25 1.67

Capitol Area Energy, Inc., November 14, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for December on the NYMEX dropped $ 0.006 lower Friday to settle at $ 6.312 per MMBtu, falling for a 4th consecutive day amid speculation a slowing economy will cut demand and after the EIA reporting a larger than expected storage build. First-time claims for US unemployment insurance rose last week to the highest level since September 2001, when the economy was last in a recession, as weakening demand led companies to fire more workers. Although weather forecasts point to colder-than-normal temperatures in the Northeast and Midwest over the next two weeks, supply constraints are unlikely given an abundance of natural gas in storage. The National Weather Service is predicting belownormal-temperatures in the eastern half of the US until November 26th. The economic downturn has created concerns about declining demand for natural gas and other energy commodities. Last wee, the EIA reported a storage injection of 62 Bcf, much higher than expected, compared to an injection of 4 Bcf last year. The report also showed total storage levels of 3.467 Tcf are now 112 Bcf above the 5-year average. For this week, look for an injection of between 5 and 15 Bcf. For this week, major resistance is seen at $ 07.91, with minor at $ 6.490, while major support is seen at $ 5.750 and minor at $ 6.285.
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX December 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.31 6.44 6.50 6.76 7.10 Change -0.01 -0.01 -0.00 0.01 0.02

NOV. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 6.469 5.72 3.43

EIA GAS STORAGE
Region East
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 2041 461 965 3467

Change 31 4 27 62

West Prod Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17

2006 11.43 8.40 2007 5.84 6.92

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

◄ LINKS ►
If you are interested in receiving electricity bids, simply complete our Letter of Authorization and fax it back to 512-266-4712. Click Here! LETTER OF AUTHORIZATION If you are currently under contract and would like notification of natural gas or electricity rates, please sign up to receive future prices. Click Here! NATURAL GAS & ELECTRICITY SIGN UP

By Gavin Evans and Grant Smith-Nov. 17 (Bloomberg) -- Oil fell for a second day as Japan entered its first recession since 2001 and China's largest crude producer said demand has declined ``sharply.'' Japan's economy contracted 0.4 percent in the third quarter, official figures today showed. China National Petroleum Corp., the biggest producer in the world's second-largest oil consumer, said demand has fallen since September because of the global credit crisis. OPEC may wait until December to cut output, the group's president said. ``As the stream of bearish news continues unabated, oil prices are again under pressure,'' said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ``The only hope for a price recovery is a big production cut by OPEC or a shut-in of some high-cost non-OPEC production.'' Crude oil for December delivery dropped as much as $1.44, or 2.5 percent, to $55.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $55.83 at 11:11 a.m. in London. Prices remained lower today even after Royal Dutch Shell Plc and Chevron Corp. announced pipeline disruptions in Nigeria. Shell extinguished a fire at a pipeline that carries crude to the Forcados export terminal. Chevron shut its onshore production in the country after a pipeline breach last week.

Crude Oil Falls as Global Slowdown Cuts Demand in China, Japan

MCPE AVERAGE
ERCOT Houston North West Ave 27.17 26.85 14.38 26.96 Change 8.89 8.90 9.45 8.90

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Capitol Area Energy, Inc., November 21, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for December on the NYMEX rose $ 0.164 higher Friday to settle at $ 6.48 per MMBtu, as colder weather sparked more heating demand. Colder-than-normal weather is probable from Texas to Maine through next week, according to the latest forecast. Right now cold weather is trumping concern over the economy. Natural gas prices gained 2.7% last week. The December futures contract expires today. A cold December, was forecast a couple of months ago. If that happens, there is more upside potential. Cold weather in the Midwest and Northeast may be the dominant pattern into early December, according to EarthSat Energy Weather of Rockville, Maryland. “A very chilly forecast continues here for the first part of December.” The lower temperatures may bring a withdrawal from storage of as much as 35 Bcf in the current week. Last week, the EIA reported a storage injection of 16 Bcf, higher than expected, compared to an injection of 0 Bcf a year ago. The report also showed that total storage levels of 3.488 Tcf are now 140 Bcf above the 5-year average. For this week, look for a withdrawal of about 10 to 20 Bcf. For this week, major resistance is seen at $ 8.160, with minor at $ 7.140, while major support is seen at $ 6.510 and minor at $ 6.950.

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX December 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.48 6.51 6.51 6.72 7.00 Change 0.16 0.12 0.10 0.06 0.05

NOV. 2008 GAS PRICES
Point Price 6.469 5.72 3.43 NYMEX Houston Ship Channel Waha Hub

NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

EIA GAS STORAGE
Region East
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 2041 473 974 3488

Change 0 5 11 16

West Prod Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17

2006 11.43 8.40 2007 5.84 6.92

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

◄ LINKS ►
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Citigroup Gets Guarantees on $306 Billion of Assets
By Bradley Keoun-Nov. 24 (Bloomberg) -- Citigroup Inc., facing the threat of a breakup or sale, received $306 billion of U.S. government guarantees for troubled mortgages and toxic assets to stabilize the bank after its stock fell 60 percent last week. Citigroup also will get a $20 billion cash injection from the Treasury Department, adding to the $25 billion the company received last month under the Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend. Citigroup rose as much as 41 percent in German trading today. The Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement that the move aims to bolster financial-market stability and help restore economic growth. The decision came after New York-based Citigroup’s tumbling share price sparked concern that depositors might pull their money and destabilize the company, which has $2 trillion of assets and operations in more than 100 countries. Citigroup’s stock plunged 83 percent this year and dropped below $5 last week for the first time since 1995. The shares were up $1.26 at $5.03 in Germany in recent trading. The government’s preferred shares come with warrants to buy 254 million Citigroup shares at $10.61 each, allowing taxpayers to profit if the stock rallies following the government’s investment, according to a term sheet that accompanied the agencies’ statement. Citigroup is required to pay a quarterly dividend of no more than 1 cent a share for the next three years, down from 16 cents in the most recent quarter.
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MCPE AVERAGE
ERCOT Houston North West South Ave 31.99 31.82 31.88 25.39 Change -0.99 -0.64 -0.76 13.43

Capitol Area Energy, Inc., November 28, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for January on the NYMEX dropped $ 0.368 Friday to settle at $ 6.51 per MMBtu, falling on concern a worsening economy will cut demand. The recession is cutting into demand in the US, where about 42% of natural gas consumption comes from industrial and commercial users. Oil also slid lower before ministers from OPEC met in Cairo to consider an output cut after a 64% drop in crude prices from a July record. Moderating temperatures could reduce demand and lessen withdrawals from storage. Prices also fell as speculators sold profitable positions while closing their November trading books. Lower trading volumes during the holiday weekend contribute to a cascading effect on prices. Equity markets, which had helped lift commodities in the past week, are also providing little direction. Last week, the EIA reported a storage withdrawal of 66 Bcf, somewhat higher than expected, compared to a withdrawal of 8 Bcf a year ago. The report showed that total storage levels of 3.422 Tcf are now 88 Bcf above the 5-year average. For this week, look for a withdrawal of about 30 to 40 Bcf. For this week, major resistance is seen at $ 8.160, with minor at $ 7.920 while major support is seen at $ 6.210 and minor at $ 6.670.

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX Jan 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 6.51 6.87 6.87 7.13 7.38 Change -0.37 0.46 0.42 0.39 0.37

Dec. 2008 GAS PRICES
Point Price 6.888 6.11 4.99 NYMEX Houston Ship Channel Waha Hub

NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

EIA GAS STORAGE
Region East
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1990 467 965 3422

Change -51 -6 -9 -66

West Prod Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17 6.89

2006 11.43 8.40 2007 5.84 6.92

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

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Oil groups expect $40 barrel – CNOOC head

By Alan Beattie in Barcelona-The world’s national oil companies expect oil prices to fall further and will cancel most planned investment projects even at current levels, according to the head of a Chinese state-owned group. A recent meeting of the national oil companies in Beijing had predicted oil prices would fall to about $40 a barrel, Fu Chengyu, chief executive of China National Offshore Oil Corporation, told a conference in Barcelona. “The consensus at the time was that everybody realized the oil price would be even lower,” Mr Fu told the Global China Business meeting. “Nobody knew where it would be but most of them said around $40.” Mr Fu said that about 27 companies from 23 countries attended the meeting in Beijing, which he said was on October 17 or 18, though he declined to name those present. He described the tone of the meeting as one of “panic” at falling prices. Executives thought that the oil price would soon rebound to about $50-$55, he said, but even at those levels, investment in new production would be cut back heavily. “If the oil price remained around $50 or $55, that would mean cutting at least 60 per cent of budgeted projects for the next one or two years from the national oil companies,” Mr Fu said. Of the new extraction projects planned by state-owned oil companies in deep-sea areas, the lowest break-even oil price was about $60 a barrel and the highest about $90 per barrel, he said. “When most of the oil companies budgeted their projects, they were using $70, $80, even $100 a barrel for their cash flow calculations,” he said. “For those projects that have started, certainly they will try to complete them, but for those projects that have not started yet they will delay or cancel. Simply, they don’t have enough cash to do all of those that they budgeted.” Mr Fu also said that any cut in production by OPEC, the cartel of oil exporting countries, was regarded as likely to be ineffectual. “Most of the consensus said that if OPEC cut production, it might not be as effective as they thought,” said Mr Fu. Even when OPEC had previously announced an output reduction of 1.5m barrels a day, the global oil price still went down, Mr Fu added.
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MCPE AVERAGE
ERCOT Houston North West South Ave 37.93 37.93 37.93 37.93 Change -4.35 -4.35 -4.35 -4.35

Capitol Area Energy, Inc., December 5, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for January fell $ 0.275 lower Friday to settle at $5.742 per MMBtu, falling to the lowest price in more than 15 months as a slowing economy cut demand from utilities and industrial users. About 42% of US natural gas consumption comes from industrial and commercial users, and another 30% is used in electricity generation. Employers last month reduced jobs at the fastest pace since December 1974, shrinking payrolls by 533,000 workers. Natural gas futures dropped 12% last week, the biggest drop since August. Demand from industrial consumers was about 1 Bcf per day, or 6.3%, lower in November than a year earlier. Industrial production in such areas as steel is slumping as the US economy sags. Should the economy worsen further, as much as a 2 Bcf per day may be removed from industrial usage. Crude oil prices fell to the lowest since December 10, 2004. Last week, the EIA reported a storage withdrawal of 64 Bcf, a little less than expected, compared to a withdrawal of 66 Bcf a year ago. The report also showed that total storage levels of 3.358 Tcf are now 69 Bcf above the 5-year average. For this week, look for a withdrawal of about 80 to 90 Bcf. For this week, major resistance is seen at $ 7.950, with minor at $ 5.770, while major support is seen at $ 5.250 and minor at $ 5.725.
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX Jan 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 5.74 5.76 5.83 6.17 6.51 Change -0.28 -0.28 -0.28 -0.28 -0.27

Dec. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 6.888 6.11 4.99

EIA GAS STORAGE
Region East
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Bcf 1929 466 963 3358

Change -61 -1 -2 -64

West Prod Total

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17 6.89

2006 11.43 8.40 2007 5.84 6.92

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

◄ LINKS ►
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By Nidaa Bakhsh-Dec. 5 (Bloomberg) -- The International Energy Agency cut its global oil demand forecast for 2009 because of the world economic slowdown. The Paris-based agency reduced its demand forecast by 170,000 barrels a day from its November estimate to 86.37 million barrels a day, analyst David Martin said in a phone interview today as the agency issued an update to its July’s Medium-Term Oil Market report. The forecast for 2013 demand has been lowered by 2.9 million barrels a day to 91.25 million barrels a day from a July estimate of 94.14 million barrels a day, Martin said. Consumers have cut spending amid a global economic downturn, reducing demand for fuels such as gasoline, and naphtha, used in plastics, clothing, and toys. The IEA has removed Kuwait Petroleum Corp’s fourth refinery at Al-Zour and Saudi Arabia’s Jubail facility from its forecast of world refinery capacity in 2013 as lower demand delays projects. That cuts 825,000 barrels a day from refinery capacity in 2013, now forecast to rise 7.98 million barrels a day in the next five years. These large-scale projects “can no longer realistically be completed within the time frame,” the IEA said. The IEA’s forecast for 2008 demand has been reduced by 40,000 barrels a day from last month’s report, Martin said. Gasoline and naphtha demand will remain weak while growth is biased toward diesel, the IEA said today in the report.

IEA Cuts 2009 Global Oil Demand on Slowing Economy

MCPE AVERAGE
ERCOT Houston North West Ave 32.75 32.75 32.75 32.75 Change -8.98 -8.98 -8.98 -8.98

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South

Capitol Area Energy, Inc., December 15, 2008

NATURAL GAS & ELECTRICITY
u

NATURAL GAS
Natural gas futures for January on the NYMEX climbed $ 0.157 per MMBtu yesterday to settle at $ 5.645 for the first time in three days on a forecast for colder weather across most of the nation. Prices edged higher Monday as cold temperatures are expected to increase heating demand in the Midwest. The National Weather Service forecast for next week calls for colderthan-normal temperatures to stretch from the Northwest across the Midwest and into the Northeast. Those temperatures are expected to moderate by the end of the year, with temperatures in the Northeast warming to above seasonal norms. Temperatures are predicted to be near or below normal in the Midwest over that same period. The Midwest will continue to battle cold weather over the next several days. However, that colder weather is not expected to move into the Northeast. It will remain anchored over the major natural gas consumption regions of the Northern Plains, Midwest and Great Lakes where low temperatures will range from 5-30 degrees below zero over the next few days. Analysts with Tudor, Pickering, Holt Securities cut their 2009 natural gas price forecast to $ 5.50 per Mcf from its previous prediction of $ 8 per Mcf, citing an oversupplied market and weakened demand. Last week, the EIA reported a storage withdrawal of 67 Bcf, somewhat less than expected, compared to a withdrawal of 129 Bcf a year ago. The report also showed that total storage levels of 3.291 Tcf are now 110 Bcf above the 5-year average. For this week, look for a withdrawal of about 120 to 130 Bcf. For this week, major resistance is seen at $ 7.795, with minor at $ 5.795, while major support is seen at $ 5.250 and minor at $ 5.570.
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX Jan 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 5.68 5.67 5.74 6.09 6.44 Change 0.15 0.15 0.12 0.10 0.09

Dec. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 6.888 6.11 4.99

EIA GAS STORAGE
Region East West Prod Total Bcf 1871 465 955 3291 Change -58 -1 -8 -67

J

F 6.29

M 6.30 7.11 7.65

A 7.32 7.23 7.56

M 6.75 7.20 7.51

J 6.12 5.93 7.59

J 6.98 5.89 6.93

A

S

O

N

D

2005 6.21

7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17 6.89

2006 11.43 8.40 2007 5.84 6.92

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2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

Crude Oil Rises as OPEC Members Prepare to Reduce Production

By Alexander Kwiatkowski-Dec. 16 (Bloomberg) -- Crude oil rose after Venezuela’s oil minister said OPEC will reduce production by at least 1 million barrels a day in an effort to stem a slump in prices. The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, is ready to make a “big” cut in supplies when it meets tomorrow, Venezuelan Oil Minister Rafael Ramirez said today. Crude has tumbled 70 percent from a record $147.27 a barrel on July 11 as the deepening global recession cuts demand for fuel. “There is too much oil on the market right now,” said Johannes Benigni, chief executive officer at consultants JBC Energy GmbH in Vienna. “Whatever they do now, presumably more than a 2 million barrels a day cut, is going to help, but what helps the psychology is that Russia has also announced they may join in.” Crude oil for January delivery rose as much as 96 cents, or 2.2 percent, to $45.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $44.97 at 10:30 a.m. London time. OPEC members and other producers such as Russia are under increasing pressure to reduce supplies as oil’s $100 a barrel collapse cuts export revenue, creating budget shortfalls. World oil demand will fall this year for the first time since 1983 as the recession cuts fuel consumption, the International Energy Agency said last week.
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MCPE AVERAGE
ERCOT Houston North West South Ave 62.54 62.47 57.64 62.42 Change 32.91 33.14 49.41 33.30

Capitol Area Energy, Inc., December 15, 2008

NATURAL GAS & ELECTRICITY
NATURAL GAS
Natural gas futures for January on the NYMEX dipped $ 0.214 lower Friday to settle at $ 5.334 per MMBtu, driven down by falling crude oil prices and expectations for mild weather across much of the nation next month. There was a big pull-down on the natural gas contract from crude oil as traders questioned whether the OPEC would fully enforce a planned record output cut of 2.2 million bpd. Abovenormal temperatures will be centered on Texas and spread throughout the Southwest, extending into the Great Lakes and Mid-Atlantic states in January-March 2009, the National Oceanic Atmospheric Administration said in a forecast update. The National Weather Service is predicting below-normal temperatures in New England and the Upper Midwest from December 23rd to December 31st. A largerthan-expected pull from gas storage last week failed to provide sustained support for prices. Last week, the EIA reported a storage withdrawal of 124 Bcf, somewhat more than was expected, compared to a withdrawal of 128 Bcf a year ago. The report also showed that total storage levels of 3.167 Tcf are now 114 Bcf above the 5-year average. For this week, look for a withdrawal of about 120 to 130 Bcf. For this week, major resistance is seen at $ 7.775, with minor at $ 5.40, while major support is seen at $ 4.590 and minor at $ 5.250.
NYMEX HISTORICAL NATURAL GAS PRICES
2005 15.00 10.00 5.00 0.00 2006 2007 2008

David Babin 5105 Pryor Lane Austin, Texas 78734 Phone 512-266-4710 Fax 512-266-4712 www.capitolareaenergy.com

NATURAL GAS PRICES
NYMEX Jan 08 03 Month Strip 06 Month Strip 12 Month Strip 18 Month Strip Last 5.33 5.39 5.50 5.85 6.17 Change -0.21 -0.21 -0.19 -0.18 -0.18

Dec. 2008 GAS PRICES
Point NYMEX Houston Ship Channel Waha Hub Price 6.888 6.11 4.99

EIA GAS STORAGE
J F 6.29 M 6.30 7.11 7.65 A 7.32 7.23 7.56 M 6.75 7.20 7.51 J 6.12 5.93 7.59 J 6.98 5.89 6.93 A S O N D

Region
2005 6.21 7.65 10.85 13.91 13.83 11.18 7.04 6.11 6.82 5.43 8.39 4.20 6.42 7.47 7.15 7.27 6.47 8.32 7.17 6.89 2006 11.43 8.40 2007 5.84 6.92

Bcf 1780 454 933 3167

Change -91 -11 -22 -124

East West Prod Total

2008 7.17 7.996 9.83 9.578 11.28 11.92 13.11 9.21

Crude Oil Continues Downturn, But May Be Stabilizing
On Friday the market ended the day on a slightly positive note (with the exception of the expiring Jan NYMEX WTI contract). So far this morning the complex is showing small gains after a very quiet weekend as we enter a period of low liquidity resulting from many participants already heading to the sidelines ahead of the upcoming Christmas and New Year’s holidays. The main drivers that have been impacting the price of oil for the last several months remain in place.... energy fundamentals (in particular declining demand), OPEC, equities, and the direction of the dollar. As we have been indicating for about a week or so all of these markets are currently in a transition. Oil is showing many of the characteristics of a bottoming pattern as is the equity markets. The dollar has lost a lot of its luster and has been back into a downward decline for the last several weeks. If the current market transition remains in place for the next several weeks it could be supportive for a modest move to the upside for oil. The biggest question in front of the oil market is will the announced OPEC cuts be enough to stay ahead of the demand decline curve and if so when can we expect the current overhang of oil to begin to be eliminated? As we discussed in detail last week we do expect OPEC to regain control of the situation and as such the current overhang of oil will slowly begin to be eliminated. It is going to take the better part of the 1st quarter of 2009 before we can expect to see global inventories solidly enter a destocking pattern even if OPEC’s compliance rate is not 100%. The lower the compliance the longer the period of time before the supply & demand balance will change. We expect OPEC compliance levels will be between 70 to 80% at least in the short term. With a new US President just weeks away from taking over the reins of the largest economy in the world and the euphoria building around that event we see the short to medium term market sentiment slowing becoming less negative. In addition with trillions of dollars of stimulus packages already announced by the US and many nations around the globe the trading community is slowly going to recognize that the global economic downturn may also be bottoming out. We expect the massive global investments will begin to work their way into the economies during the later part of the first half of 2009 with results seen as early as the later part of 2009. Results will come in the form of job creation or at least the elimination of job losses.One of the many signals we will be watching closely is the shape of the forward curve. The forward curve for everything in the energy complex is in a strong contango. As less crude oil is produced and exported by OPEC and possibly several non-OPEC nations the forward curve should start changing its shape to a more modest contango at first to even a complete transition to a backwardation over time( if the OPEC cuts last through at the least the first half of 2009). On the refined product side with refiners cutting back refinery utilization rates and likely to remain in that mode for several months the production of refined products will decline and thus refined product inventories will also decline. Again the first sign that this pattern is emerging will be a change in the shape of the forward curves for HO & gasoline both of which are currently in a steep contango. To remove your name for our mailing list, please click here. Questions or comments? E-mail us at newsletter@capitolareaenergy.com

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MCPE AVERAGE
ERCOT Houston North West South Ave 27.32 27.32 27.32 27.32 Change -11.46 -11.25 3.03 -11.11