U.S. natural gas inventories seen starting 2001 at record low - study AFX News Limited

December 13, 2000

WASHINGTON (AFX) - If December storage withdrawals of U.S. natural gas meet expectations, the country's gas market will start the new year with inventory levels at a record low, according to a new report by Cambridge Energy Research Associates (CERA).

CERA said the gas market is forecast to enter the new year with inventory levels of 1,850 trln cubic feet, "more than 650 billion cubic feet lower than at the beginning of this year."

As a result, average annual New York Mercantile Exchange Henry Hub gas futures prices are forecast "between 5.50 and 6.50 usd per thousand British thermal units (BTUs) for 2001, a record high," CERA said.

The Nymex January Henry Hub futures contract was trading around 8.23 usd per thousand BTU at midday today.

CERA attributed the recent spike in gas prices to colder-than-normal weather through November and the first half of December throughout the midwest and northeast, diminishing inventories and rising gas demand for power generation.

"If sustained, these price levels will induce a political reaction that will shake the industry," CERA added.

http://denver.petroleumplace.com/egatecom/scream/2000/12/13/AEF/6673-1873-COM.NEW.PRD.USA...html

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