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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Tomas who wrote (23119)5/29/2003 3:43:51 PM
From: Tomas  Read Replies (1) of 206116
 
Natural gas prices expected to stay high
Bloomberg, Thursday, May 29

Natural-gas prices will remain over $5 US per million British thermal units throughout the summer as industry efforts to refill depleted storage reservoirs compete with demand from what is expected to be an unusually warm summer, a trade association said.

Demand is expected to rise among power plants, many of which use gas to generate electricity for air conditioning, and for residential use as new homes are built, the Natural Gas Supply Association said in its first summer gas-price report. Commercial and industrial demand likely will fall as high prices drive down consumption.

Gas prices have averaged close to $6 this month after reaching more than $9 in February.

Driving the prices was a drop in production following unusually warm weather in 2001-2002. The mild temperatures cut prices almost in half and eroded incentives to drill more wells. The 1.8 per cent decline in 2002 production left the industry unable to refill storage following this year's exceptionally cold winter in the North and East, the association said.

U.S. gas inventories are at 990 billion cubic feet, 35 per cent lower than the five-year average and 44 per cent lower than year-ago levels.

Overall summer consumption in the U.S. is expected to fall 3.1 per cent to 52.5 billion cubic feet of gas a day, mostly because of an 8.4 per cent drop in industrial demand as businesses shut down or switch to cheaper fuels.
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