Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.


Liquidity and Capital Resources

     The Partnership does not engage in the sale of goods or services.  Its only
assets are its  investment  in the Master,  cash and  interest  receivable.  The
Master  does not  engage in the sale of goods or  services.  Because  of the low
margin deposits normally required in commodity futures trading, relatively small
price movements may result in substantial losses to the Partnership.  During the
six months  ended June 30 2003,  the Master  experienced  a  cumulative  loss of
approximately 22%. This loss was primarily  attributable to extraordinary  price
activity in U.S.  natural gas markets at the end of February which led to losses
in the Master's energy market positions. The Masters' liquidity was not hindered
as a result of these market movements.

     The  Partnership's  capital  consists of the capital  contributions  of the
partners as increased or decreased by its  investment  in the Master,  expenses,
interest income, redemptions of Units and distributions of profits, if any.

     For the six months ended June 30, 2003, Partnership capital decreased 11.0%
from  $126,845,282 to  $112,854,398.  This decrease was attributable to net loss
from  operations of $32,154,184  coupled with  redemptions  of 5,654.3622  Units
resulting  in an  outflow  of  $4,327,700  which  was  partially  offset  by the
additions of 21,617.7465  Units totaling  $22,491.000.  Future  redemptions  can
impact the amount of funds  available for investment in the Master in subsequent
periods.

     The Master's capital  consists of the capital  contributions of the members
as  increased  or decreased  by realized  and/or  unrealized  gains or losses on
commodity futures trading,  expenses,  interest income, redemptions of Units and
distributions of profits, if any.

     For the six months ended June 30,  2003,  the  Master's  capital  decreased
19.7% from  $350,283,453 to $281,329,159.  This decrease was attributable to net
loss from  operations of  $73,631,905,  coupled with  redemptions of 28,881.9927
Units totaling  $38,872,082  and  distribution  of interest of $1,629,621 to the
Partnerships,  which was partially offset by the additions of 32,329.8028  Units
totaling  $45,179,314.  Future  redemptions  can  impact  the  amount  of  funds
available for investments in commodity contract positions in subsequent periods.


                                       17

<PAGE>


Critical Accounting Policies

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities,  and disclosures of contingent assets and liabilities at
the date of the financial  statements  and the reporter  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from these
estimates.

     All commodity interests  (including  derivative  financial  instruments and
derivative commodity  instruments) are used for trading purposes.  The commodity
interests  are  recorded on trade date and open  contracts  are  recorded in the
statement of financial  condition at fair value on the last  business day of the
period,  which represents  market value for those commodity  interests for which
market  quotations are readily  available or other measures of fair value deemed
appropriate by management of the General Partner for those  commodity  interests
and foreign  currencies for which market  quotations are not readily  available,
including  dealer quotes for swaps and certain option contracts . Investments in
commodity  interests  denominated in foreign currencies are translated into U.S.
dollars at the exchange rates prevailing on the last business day of the period.
Realized gains (losses) and changes in unrealized values on commodity  interests
and foreign  currencies  are  recognized  in the period in which the contract is
closed or the changes occur and are included in net gains (losses) on trading of
commodity interests.

     Foreign currency contracts are those contracts where the Partnership agrees
to receive or deliver a fixed  quantity of foreign  currency for an  agreed-upon
price on an agreed future date. Foreign currency contracts are valued daily, and
the  Partnership's net equity therein,  representing  unrealized gain or loss on
the contracts as measured by the difference between the forward foreign exchange
rates at the dates of entry  into the  contracts  and the  forward  rates at the
reporting dates, is included in the statement of financial  condition.  Realized
gains (losses) and changes in unrealized  values on foreign  currency  contracts
are  recognized  in the period in which the  contract  is closed or the  changes
occur and are included in the  statement  of income and  expenses and  partners'
capital.

Results of Operations


     During the  Partnership's  second  quarter of 2003, the net asset value per
unit increased 17.7% from $717.72 to $844.99. The Partnership  experienced a net
trading gain in the second quarter of 2003 of $17,337,509.  Gains were primarily
attributable  to the Master's  trading of  commodity  futures in IPE Brent Crude
Oil,  NYMEX  Unleaded  Gas and NYMEX  Heating Oil and were  partially  offset by

                                       18
<PAGE>

losses in energy swaps,  NYMEX Crude Oil and NYMEX Natural Gas. The  Partnership
commenced  trading  operations  on July 1,  2002  and as a  result,  comparative
information is not available.

     Commodity futures markets are highly volatile.  The potential for broad and
rapid price fluctuations  increases the risks involved in commodity trading, but
also increases the possibility of profit.  The  profitability of the Partnership
(and the Master Fund) depends on the Advisor's ability to forecast price changes
in energy and energy related commodities.  Such price changes are influenced by,
among  other  things,   changing  supply  and  demand  relationships,   weather,
governmental, agricultural, commercial and trade programs and policies, national
and  international  political and economic events and changes in interest rates.
To the extent that the Advisor  correctly makes such forecasts,  the Partnership
(and the Master Fund) expects to increase capital through operations.



     Interest income on 80% of the Partnership's  average daily equity allocated
to it by the Master was earned at a 30-day U.S.  Treasury  bill rate  determined
weekly  by CGM  based  on the  average  non-competitive  yield on  3-month  U.S.
Treasury  bills  maturing in 30 days.  CGM may  continue to maintain  the Master
assets in cash and/or place all of the Master  assets in 90-day  Treasury  bills
and pay  the  Partnership  80% of the  interest  earned  on the  Treasury  bills
purchased. CGM will retain 20% of any interest earned on Treasury bills.

     Management  fees are  calculated as a percentage of the  Partnership's  net
asset value as of the end of each month and are affected by trading  performance
and redemptions.

     Special  limited  partner  allocations are based on the new trading profits
generated  by the  Advisor at the end of the year,  as  defined in the  advisory
agreements between the Partnership, the General Partner and the Advisor.


                                       19