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

To: Tomas who wrote (64228)	4/10/2000 10:26:00 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Natural gas prices - OGJ Newsletter, April 10 With oil prices dominating industry news in recent months, the continuing strength in US natural gas prices seems to be getting overlooked. PaineWebber has raised its projected composite spot natural gas price forecast for 2000 by 10½ to $2.50/MMbtu from its original projection. "Evidenced by the 12-month NYMEX strip trading north of $2.90/MMbtu on the heels of the warmest winter on record," the analyst said, "the natural gas supply-demand environment remains very favorable." PaineWebber bases its revised assessment on expectations for "solid" demand for gas from power generators and on continuing deliverability issues. "Our newellipseestimate compares with the current [Wall] Street consensus of $2.49/MMbtuellipse.These changes reflect ongoing increases in weather-normalized demand, depressed deliverability, as well as the reality that the drilling response, while increasing, remains limited," it said. Salomon Smith Barney concurs, saying, "With only 1 week left in the traditional storage withdrawal season, total storage levels will start the summer injection season around 1 tcf, or at least 25% lower than last year. The anticipation of a difficult storage injection season-given current storage levels and the year-over-year deliverability shortfall-has already put the heat on natural gas prices." North American natural gas prices, supplies, and demand should continue to be strong through 2001, although expectations among various business sectors "may not all be moving in the same direction," Ziff Energy Group reported at its Houston conference on North American gas strategies last week. In Ziff's latest annual gas industry outlook survey, 54% of the 144 respondents-representing 65 US and 59 Canadian companies across the gas industry spectrum-predicted NYMEX gas futures prices will be $2.73-3.13/MMbtu by yearend. Another 40% expect yearend prices to exceed $3.13/MMbtu. Almost all of the respondents think North American gas sales will grow at least 2%/year through 2001. Producers are more optimistic about growth of supply than about demand growth, with 70% of the Canadians and 54% of the US firms expecting to hike production at least 5% this year. In fact, 25% of the Canadians and 19% of the US firms expect to boost output by more than 15%. Most producers expect to increase spending on gas operations by more than 5%/year through 2001, with about a third planning spending increases in excess of 15%/year.