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To: Tomas who wrote (71215)	8/19/2000 8:41:01 PM
From: Tomas	Read Replies (3) \| Respond to of 95453

Natural gas panic looming? Oil & Gas Journal, last week's issue Some analysts are warning of a coming spike in natural gas prices this winter, expressing concerns over the low level of storage and the lag time in getting wellhead deliverability back up to where it belongs in order to meet expected spurts in demand as cold weather snaps arrive this winter. AGA has warned that US consumers could face significantly higher natural gas prices this winter. Noting that spot gas prices have topped $4.50/Mcf in the past month and still hover near $4/Mcf, an AGA report says prices could go higher still in the near term as more supply is directed toward storage. But Greenwich, Conn., analyst Charles Maxwell of Weeden & Co. fears that, given the increased gasfired power demand cooking load, the strong US economy and a return to normal winter weather-- which the last few winters decidedly have not been-markets are likely to see storage to come in below 2.5 tcf. That's well below the 3 tcf that is considered the safe threshold for the start of the heating season. Maxwell said, "In practical terms, unless the coming winter approaches the highly unusual, +13% warmer-than-usual season we have just passed through, US gas storage numbers are accumulating in a potentially disastrous pattern of insufficient gas to take this country through the full span of cold weather to April of 2001. "There is the possibility that we will be forced to allocate gas supplies to private homes, government departments, and public institutions, to defense installations, and to schools, universities, hospitals, and so on:' He sees this as a likely scenario unless some reversal in the US gas consumption trend of 3%/year growth is forthcoming. Accordingly, Maxwell speculates that natural gas prices could peak in February at $6-7/MMbtu. The results could be a higher price range for natural gas, application of new technology, increased drilling, more LNG terminals, and an increased push to bring Alaskan gas south.