Market pressure on winter gas prices flat - NGSA

27 September 2007 19:27  [Source: ICIS news]

WASHINGTON (ICIS News)--Market pressures on natural gas prices should remain relatively flat this winter, the Natural Gas Supply Association (NGSA) said on Thursday in its annual Winter Outlook.

The NGSA considered the US economy, weather, storage and gas supply/demand in projecting trends for natural gas prices. The group does not, however, predict wholesale or retail natural gas prices.

Factors such as a warm winter, a flat economy and moderate gas demand and supply should keep price pressures flat, according to the outlook.

The outlook cited several authorities, including weather forecasts from the National Oceanographic and Atmospheric Administration (NOAA) and gas demand projections from Energy Ventures Analysis (EVA).

Forecasts from NOAA call for the US winter to be colder than the last two winters but still warmer than the 30-year average. The NGSA added that hurricane activity in the rest of this year's hurricane season would place upward price pressures on natural gas.

Projections from EVA call for gas demand to increase 278bcf, or 1.8%. That would result in an increase in natural gas demand for residential and commercial consumers by about 168 bcf, or 3.2% above last winter.

A high level of activity for US natural gas rigs also should keep supply high, the NGSA concluded.

Rig activity in August averaged 1,473 as compared with 1,342 rigs at the same time last year, an increase of 10%, according to an analysis by ICF International.

The increased rig activity should result in 30,500 gas wells completed in 2007, up from 29,000 in 2006, according to ICF. That will boost natural gas production in the continental US to 51.3bcf/day, up from 50.7 bcf/day in 2006, a 1.2% increase.

"US rig counts and natural gas completions continue at a high pace," NGSA Chairman Chris Conway said in a statement. "This is evidence of the huge investments being made by both the major and independent natural gas producers to sustain and increase US natural gas production both onshore and offshore."

By: Mickey McCarter
+1 713 525 2653

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