More on projected gas shortage from World Oil Magazine:
worldoil.com
Gas price outlook. In its latest look at the U.S. natural gas business, Raymond James & Associates, Inc., sees gas prices sustainable at more than $4.00 per Mcf for years to come. J. Marshall Adkins, the firm's energy team director, says, despite gas storage levels that are higher than originally anticipated (2.65 Tcf now vs. 2.3 Tcf earlier), it is clear that the U.S. is headed for a natural gas crisis this winter.
According to the report, the slightly increased storage will not prevent the possibility of a severe natural gas shortfall. "No longer are we talking about the ramifications of a colder-than-normal winter. With our projections, it does not matter how warm the winter turns out to be. We should still end the withdrawal season, at best, with less than 1 Tcf in storage. On the other hand, if this winter is normal or even slightly warmer than normal, we think storage will end the withdrawal season at previously untested low levels of gas."
If the above does transpire, Adkins, et al., say gas prices will likely "explode," and that marginal gas consumers will be shut down, while the supply / demand equation would be forced to self-correct through reduced consumption. Consequently, Raymond James & Associates is raising its 2001 natural gas projection by $0.25 to $4.00, while at the same time saying the forecast is probably too conservative. |
