<I bet Kenny is short :-)> Moi? nooooo. I see CHK was downgraded by CSFB..This weeks aga #'s should definitely move things one way or t'other..
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"Great rise in gas prices unlikely"
"The DOE on Thursday put stored gas levels at just 17 percent below the five-year average for the last week in June"
07/06/03
John Funk
Plain Dealer Reporter
The nation's gas producers - with help from Mother Nature and a weak economy - may be able to avert the predicted natural gas crisis this winter.
"I am cautiously optimistic," said Thomas Pearce, a natural gas specialist with the Public Utilities Commission of Ohio.
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Pearce doesn't see gas prices plummeting in the coming months. But he doesn't see them spiking, either. Gas rates - what you pay for every thousand cubic feet you burn - will probably be about what they were last winter, Pearce said.
Industry analysts are using a similar lens.
"It still looks as if prices will stay moderately high this winter," said James Halloran, energy analyst with National City Wealth Management. "But pressure on prices is easing somewhat . . . so unless summer is hotter than normal or we have a glitch in production such as [Gulf] hurricanes, prices should not be outrageous, but certainly higher than last year."
Of course, a colder-than-normal winter - as well as where you set your thermostat, how efficient your furnace is and how well-insulated your home is - will determine your monthly gas bills, Pearce stressed.
The new analyses come as Ohio's two largest gas utilities - Dominion East Ohio Gas and Columbia Gas of Ohio - have filed their quarterly "gas cost recovery," or GCR, rates with the PUCO. These rates - which affect customers who do not have contracts with unregulated suppliers - are based in part on what the utilities expect to be paying, transportation charges to get the gas here, and adjustments to even out past under- or over-collections.
Dominion's requested GCR for August, September and October would jump 35 percent, from $6.35 per thousand cubic feet to $8.58. Columbia's would drop 36 percent, from $9.61 to $7.23.
By law, the utilities cannot make a profit on the gas. Almost $1 of Columbia's reduction represents a credit back to customers, said Pearce. And only about 30 cents of Dominion's increase is the result of the expected cost of gas. The rest results from under-collecting during previous quarters, he said.
Rates next winter will reflect a blend of what the utilities paid this summer for the gas they put into storage and what they are paying for winter gas, plus transportation costs to ship the gas to Ohio.
Without the stored gas to augment production in the winter, prices would spike because production alone cannot meet peak winter demand. Just six weeks ago, with storage levels at historic lows, analysts' predictions were bleak.
But the total amount of gas now going into storage is catching up with the levels of previous years, Department of Energy reports show. And weekly additions are breaking records.
The DOE on Thursday put stored gas levels at just 17 percent below the five-year average for the last week in June. In that week alone, producers tucked away 97 billion cubic feet, compared with 68 billion for the same week last year.
Cool weather accounts for some of this. Moderate temperatures in the last six weeks have kept electrical demand for air conditioning below normal, meaning electric companies have not had to switch on their gas-fired generators, leaving more gas for storage.
And more gas is being produced. The number of rigs drilling new wells has soared to more than 900 in recent weeks because the wholesale price of gas rose to about $6 per thousand cubic feet, three times the normal summer price.
The rig count this past week stood at 925. That's about 200 more than were drilling during the same week last year but still below the 1,068 of two years ago, a modern record, after a winter price spike. The net effect of these developments has pushed wholesale prices closer to $5."
To reach this Plain Dealer reporter:
jfunk@plaind.com, 216-999-4138
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Eventually, for the future,which will it be,LNG(my guess for nearterm tech development, note cove point getting ready to accept shipments),tar sands,shale,methane hydrates(someday, I'd bet),hydrogen..and let us not forget nuke power for electricity...;^)DD
Note the recovery beginning in ng storage, about 75 bcf added per week should bring it up to last years levels..And last year was a very cold Winter, not likely to be repeated this Winter..Note the ng rig count rise, Note what appears to be a breakdown mounting in the OSX, sitting at a key level of 89, 85 not to far away..and especially of note, even though I now have a 37K btu gas furnace, I've gotten 4 cord of wood put up so far..;^)
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