Strictly: Drilling II Message Board

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Strategies & Market Trends : Strictly: Drilling II

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To: steve from ihub who wrote (31479)	7/22/2003 10:26:41 PM
From: Art Bechhoefer	Read Replies (2) of 36161

While the inventory levels look about average, actual demand for natural gas is greater than it was two years ago. Therefore, the inventory levels are RELATIVELY lower. The fact is that a greater percentage of fossil fuel for electricity generation now comes from natural gas than it did two years ago. That causes an increase in demand. The only way that the present inventory levels would be sufficient to cause the price of natural gas to drop is if the summer temperatures in the mid-Atlantic and northeast states remain below average. Right now, there is so much rain that overall temperatures are cooler, lightening the load on electric power, a great deal of which is made from natural gas. If winter temperatures are warmer than last year (again, a very cold year in the northeast), then the inventory levels appear to be sufficient to keep prices from rising too fast. But then there is a matter of adequate supply. The amount of natural gas actually used is greater than the additions to reserves, which also puts upward pressure on prices. Art

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