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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: okey who wrote (3350)	7/6/1999 6:42:00 PM
From: okey	Respond to of 15703

August Crude Oil Light $19.78 +.09 +0.5% $19.99 $19.51

To: okey who wrote (3350)	7/6/1999 6:46:00 PM
From: Salt'n'Peppa	Read Replies (1) \| Respond to of 15703

Natural gas prices expected to rocket Producers refuse to commit supplies, watching prices Natural gas customers are facing record high prices this winter due to extra pipeline capacity and a gas shortage in the United States. Natural gas is trading at record prices for future sales, and analysts say consumers could see an increase of as much as 40% over last year in some parts of the country. Ed Peplinski, commodities analyst with ARC Financial Corp., said with winter contracts currently selling at about $3.07 per thousand cubic feet (all figures in U.S. dollars), producers are sitting tight refusing to commit supply in case prices continue to rise. Less than 20% of sales have been locked in for the winter, he added. Those kinds of prices have not been seen since before 1986 when the federal government deregulated the industry. "They're all rolling the dice here," said Mr. Peplinski. "It's conceivable these prices have another 20% to 30% to go, especially if we have a cold winter." Chris Sheard, president of Atco Gas, which supplies gas to 80% of Albertans, said the Alberta spot price, now at $2.80 per thousand cubic feet, is about 45¢ higher than the gas company expected. He said Atco will likely have to request a rate increase from regulators for the loss over the summer alone. ... David Wilson, vice-president of structured products at Trans- Canada Gas Services Ltd., said forward trading has slowed considerably because the industry is so bullish on prices. Much of the upward pressure on prices is coming from the U.S. market. As of the end of May, drilling activity in the United States was down 40% from last year, as a result of oil and gas producers' reduced cash flows, caused by the worldwide collapse in the price of oil. While drilling is beginning to improve, it is expected to take some time before production levels recover. U.S. gas storage inventories have also fallen due to cool weather and increased demand, although revised weather forecasts yesterday sent natural gas futures lower. More electricity generation is switching from coal to environmentally friendly natural gas, increasing demand. Stronger U.S. prices are pushing Alberta gas prices, already at record highs, even higher because the Canadian-U.S. differentials have narrowed dramatically with the addition of 1.1 billion cubic feet in new space on the TransCanada PipeLines Ltd. system and the Northern Border system to the U.S. midwest last November. Meanwhile, Calgary's Peters & Co. expects prices to rise to $3.20 for the winter heating season. Steven Bradley, manager of operations and marketing for Westminster Resources Ltd., said producers will have a tough time filling Canada's needs this winter let alone the increased demand from the United States. "It could be quite an interesting year," he said. "I think a lot of people may be taken by surprise." (article taken from Kerm Yerman's newsletter July 6th, 1999)