Natural Gas Rises to Record as Supplies l;ag

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Gas News Sat, 01 Jul 2000, 3:28pm EDT

06/27 11:34 Natural Gas Rises to Record as Supplies Seen Lagging Demand By Josh P. Hamilton

New York, June 27 (Bloomberg) -- Natural gas rose more than 3 percent to a record on speculation that production is falling short of demand for fuel to generate electricity during summer and heat homes during winter.

Demand from utilities generating electricity for air conditioning is limiting the amount of gas that can be stored for the peak-demand winter season. U.S. inventories probably rose 68 billion cubic feet last week, leaving them 23 percent lower than a year earlier, an industry report tomorrow is expected to show.

``Every week you figure a certain amount of gas should be getting into storage based on heating or cooling demand, but it never turns out to be as much as it should be,'' said Gerry Saccente, a trader at ABN Amro Chicago Corp. in New York. ``It raises the question of whether production is as high as people thought.''

Natural gas for July delivery rose as much as 15.5 cents, or 3.4 percent, to $4.715 per million British thermal units on the New York Mercantile Exchange, eclipsing the previous record of $4.60 set in December 1996. Prices are more than double year-ago levels.

The 68 billion-cubic-foot rise in inventories last week expected by analysts surveyed by Bloomberg would be less than the 91 billion put into storage a year earlier. The American Gas Association will issue its weekly inventory report tomorrow.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Gas%20News&touch=1&T=energy_news_story.ht&s=AOVjJhBUQTmF0dXJh

-- Martin Thompson (mthom1927@aol.com), July 01, 2000


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