COLD MAY BRING $7 GAS FUTURES

Gloria Gonzalez BridgeNews November 29, 2000 NEW YORK -- Natural gas futures for January delivery are expected to top the $7 mark at the New York Mercantile Exchange if the weather turns colder next month.

The December contract scored a new spot record high of $6.62 last week based on cold weather in the key Northeast consumption area during the latter half of November and on tight U.S. supplies.

Northeast residents will pay about 40 percent more for their natural gas and about 25 percent more for home heating oil this winter season because of an expected 10 percent drop in Northeast temperatures and lower-than-normal inventories, according to a study released Tuesday by the Department of Energy's Energy Information Administration.

The EIA also predicted that households heating with natural gas in the Midwest would pay about $1.97 more per thousand cubic feet this winter than last winter, citing strong demand and lower supplies.

Any cold snap will make natural gas traders nervous because of the fear that higher demand for supplemental heating fuels will deplete inventories. This results in sharp price spikes, which is why brokers think a $7 price for January natural gas is attainable.

http://www.chicagotribune.com/business/businessnews/article/0,2669,SAV-0011290391,FF.html

-- Martin Thompson (mthom1927@aol.com), November 29, 2000