04/28/00 16:38 Natural Gas Rises on Concern for Summer Supply Shortfall
By Josh P. Hamilton
New York, April 28 (Bloomberg) -- Natural gas jumped almost 3
percent, rising close to a two-year high, as signs of low U.S.
production rates reinforced concern that supply will lag demand in
the summer months.
After the warmest winter on record, U.S. inventories for the
nation's primary home-heating fuel still are 25 percent below year-
ago levels, the American Gas Association reported Wednesday. The
low inventories have caused speculation that utilities will be
actively bidding for gas to generate electricity when summer air
conditioning demand kicks in.
``Production numbers are off, and demand is expected to
continue to ratchet up,'' said George Ellis, a trader at Paribas
Futures in New York.
Natural gas for June delivery rose 8.6 cents, or 2.8 percent,
to $3.141 per million British thermal units on the New York
Mercantile Exchange, just shy of $3.158 on April 17, the highest
closing price since November 1997.
Oklahoma, the third-biggest gas producing state after Texas
and Louisiana, saw output fall last year to its lowest rate since
1933, and production is continuing a six-year slide this year, the
trade publication Gas Daily reported yesterday, citing the
Oklahoma Corporation Commission.
``It's very telling that storage was able to be drawn down
when we had this very, very mild winter,'' Ellis said. If the gas
wasn't consumed for heating with this mild winter, it went to
power generation, he said. And most utility demand won't be felt
in the market until the summer.
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