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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: CpsOmis who wrote (51862)	9/25/1999 1:28:00 AM
From: IndioBlues	Respond to of 95453

Energy Information Administration's Sept. '99 "Short Term Outlook" I don't remember this being posted previously. FWIW, the EIA is NOT projecting a major spike in wellhead gas prices from current levels. eia.doe.gov or a a weather-driven supply/demand crisis. An excerpt: "Natural Gas. Compared to our previous report, the natural gas wellhead price forecast has been raised, but just barely, and primarily for the period of September through December (Figure 11). There are two primary reasons for this revision. First, the higher (revised) crude oil price path will allow the price ceiling for natural gas to rise, particularly in the areas where both fuels are competitors, namely the industrial and electric utility sectors. In addition, the hot weather that occurred this summer increased gas demand for power generation (for air-conditioning) and in turn, slowed the rate of gas injected into underground storage at a rate less than normally expected. As a result, concern whether underground storage levels would be satisfactory to meet the winter needs sent spot wellhead prices rising by over 70 cents per million Btu from July to early September. It is our belief that this bump in prices will carry over partially, through the end of the year. Although the recent (summer) and current rates of injections to storage are somewhat down from the same period last year, it is projected that the injection rate will accelerate to levels comparable that of last year, by the end of October. This would be likely to temper wellhead prices increases over the next few months to within moderate levels. Also, net imports of Canadian gas, accounting for 15 percent of total gas demand have grown by over 13 percent this year. To some extent, the high volume of gas imports will help (directly or indirectly) to shape underground storage to sufficient levels for the upcoming winter. In spite of that, winter wellhead prices are projected to be roughly 42 percent greater than prices from last winter since the weather then was generally mild, particularly in the early part of the heating season (Figure 12)." Read the highlights: eia.doe.gov or the whole report: eia.doe.gov This is enlightening for me and makes me wonder if the major uptrend in gas prices will in fact materialize in the next few quarters to the degree many of us (me included) are betting. On the other, this is DOE work as opposed to something presumpively reliable. <vbg>