American Gas Association (AGA) Chairman Robert Best told security analysts last week that they should get used to the higher natural gas prices because they were going to be around for the entire winter season.

“As many of you know, there was a steady upward shift in the price of natural gas beginning in late November with daily and futures commodity prices rising into the $7 level,” and this has been “further complicated by the transportation cost ‘blowouts’ in New England in recent weeks,” he said in a speech before the New York Society of Security Analysts last Tuesday.

“Given the tight supply-demand relationship in the gas market today, we believe this pattern will continue throughout the winter heating season…Mild weather may dampen prices one week, but cold weather will send prices higher the next week,” noted Best, who is chairman and president of Dallas, TX-based Atmos Energy Corp, one of the largest local distribution companies (LDCs) in the nation.

But even with higher winter prices, “many analysts believe that the average price for natural gas in 2004 will be slightly lower than the $5-plus average of 2003,” he said.

Best said the AGA, which represents LDCs, believes the storage level will be adequate to meet the demand of gas customers nationwide who are facing bone-chilling temperatures this winter.

He also noted that LDCs have met the task this heating season. “From the Mid-Atlantic to the Northeast, virtually every gas utility has experienced record demand, yet every one of them delivered their contracted gas to their firm customers, with only a few minor and quickly corrected glitches. I think that speaks clearly about our industry’s ability to operate even in the most extreme and unprecedented conditions.”

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