InterviewStorms may roil high natgas prices

30 May 2008 19:59  [Source: ICIS news]

Storms may pressure high natgas pricesBy Al Greenwood

HOUSTON (ICIS news)--The US Atlantic hurricane season starts on Sunday, and any storms could disrupt natural-gas supplies at a time of high prices, an energy investment banker said on Friday.

The US chemicals industry is heavily dependent on gas as a feedstock and energy source.

On midday Friday, natural gas was trading at $11.721/m Btu, according to ICIS news. During the same time last year, natural gas was trading at $7.853/m Btu.

Over the years, pipeline and storage companies have increased capacity, which would dampen the effect of any disruptions, said Bruce Bilger, chairman and head of global energy for Lazard Freres, a financial advisory and asset management firm.

"But, nevertheless, we are going to feel an impact of any hurricane that is coming into the Gulf," he said.

Any disruptions would come at a time when demand is already high, as Americans use air conditioners during the hot summer months, Bilger said.

Government meteorologists expect an average to above-average number of hurricanes.

In any given year, 11 named storms, including six hurricanes – two of them major, with winds of at least 111mph (179km/h) - would be considered a season of average activity

There is a 65% probability of above-normal activity, and a 25% probability of normal or near-normal activity, according to the National Oceanic and Atmospheric Administration (NOAA).

Meteorologists at Colorado State University (CSU) predicted above-normal activity, with about eight hurricanes - four of them major - likely to form.

The hurricane season lasts until 30 November.

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By: Al Greenwood
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