Natural gas demand, prices on the rise 9/14/2000 As supply woes and worries keep oil prices hovering above US$30 a barrel, natural gas demand and prices also keeping reaching new levels.

Although natural gas producers ramped up production all summer and continue to expand plans and budgets for future exploration, industry analysts claim it may be a case of too little too late to bring any relief this winter.

Were drilling at unprecedented levels, said John Sharpe at the Natural Gas Supply Association, a lobby group that represents the nations biggest producers. It would be very difficult to find any spare equipment out there.

While production may be on the rise, the stored inventory reported by utilities each week keeps dropping. Currently, that supply is about 15% below where it was at this time last year and 9% below a five-year average for the season.

According to the Wall Street Journal, the front-month future contract reached $5.055 on the New York Mercantile Exchange late yesterday, up from $5.008 Tuesday. That is more than double its price in January and February.

The American Gas Association (AGA) reported yesterday that producers injected 72 billion cubic feet of natural gas into inventories for the countrys electric utilities last week, a higher than expected shot into the pipes.

Analysts with AGA and the U.S. Department of Energys Energy Information Administration (EIA) agree that a cold spike this winter could create some serious problems. Even with a typical winter, it could be another year or two before natural gas production can fully meet demand.

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-- Martin Thompson (mthom1927@aol.com), September 14, 2000

Answers

When talking about natural gas, everybody seems to overlook its first cousin, propane, which ALSO heats many homes and businesses. Natural gas invenories are down 15% from last year, spelling trouble. But, propane inventories are down 30%, spelling disaster.

-- JackW (jpayne@webtv.net), September 14, 2000.

To put these stats into even sharper perspective, figure the nation's crude oil inventories, which so many people are so alarmed about. We now have the lowest crude inventories since 1976, yet this only represents a 7% reduction from this time last year.

-- Wellesley (wellesley@freeport.net), September 14, 2000.