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

To: Platter who wrote (35052)	1/14/1999 9:25:00 AM
From: Ronald J. Clark	Respond to of 95453

Here is an explanation for lower natural gas prices (please note that the AGA reported a draw of 233BCF, not the rumored 178!) Natural Gas Falls Almost 3% as Weather Fails to Ignite Demand New York, Jan. 13 (Bloomberg) -- Natural gas fell almost 3 percent, the sixth drop in seven days, on speculation that the coldest weather of the year so far failed to reduce inventories that were 30 percent above last year. The American Gas Association was expected to report after trading that inventories fell 178 billion cubic feet, or 6.7 percent for the weekend ended Jan. 8, according to the average estimate of six analysts surveyed by Bloomberg. Earlier estimates ranged as high as 250 billion cubic feet because of severe cold and winter storms in the northern Midwest and Northeast, the two biggest natural gas markets. ''There's plenty of gas, storage is full and this winter the fuel of choice was heating oil because it was cheaper,'' said John Murphy, a gas trader at Aquila Energy Corp. in Omaha, Nebraska, the nation's second-biggest seller of natural gas. Natural gas for delivery in February at the Henry Hub in Louisiana fell 5.1 cents, or 2.8 percent, to $1.77 per million British thermal units on the New York Mercantile Exchange. The first major winter storm of the year sent temperatures plunging throughout the Midwest and raised heating-fuel demand. Weather Derivatives, a Belton, Missouri-based weather analyst, estimated that because of the cold weather AGA storage would shrink by 192 billion cubic feet, which would be the largest decrease in two years. ''If we don't get an AGA below 200 bcf, this market is going to crater,'' Murphy said. After the markets closed, the AGA said inventories fell 233 billion cubic feet, or 8.8 percent, to 2.4 trillion cubic feet. U.S. storage now is filled to 74 percent of capacity, down from 81 percent in last week's AGA report. Inventories are 21 percent higher than they were a year ago, compared with a 30 percent gap last week. This week's drop was the biggest in two years.