Calling

Calling a natural gas supply shortage in the coming year “a veryreal possibility,” Dr. Bruce M. Bell, chairman of the Mid-ContinentOil & Gas Association of Oklahoma, said there is an “urgentneed” for increased drilling activity, particularly in Oklahoma.But to increase the drilling activity you need more people, andthat shortage is directly related to the natural gas shortage. Sortof like a Catch 22.

Calling a natural gas shortage in the coming year “a very realpossibility,” Dr. Bruce M. Bell, chairman of the Mid-Continent Oil& Gas Association of Oklahoma said there is an “urgent need”for increased drilling activity, particularly in Oklahoma. But toincrease the drilling activity you need more people, and thatshortage is directly related to the natural gas shortage. Sort oflike a Catch 22.

Natural gas prices are going to jump; the only question is — how high? Calling the rising natural gas demand “phenomenal” both now and into the foreseeable future, Simmons and & Co. International vice president David Pursell said prices are trending upward, and predicted that natural gas is poised to gain a “good proportion” of the demand group.

Calling the increase in natural gas demand “phenomenal” both nowand for the foreseeable future, Simmons & Co. InternationalVice President David Pursell predicted it is “unlikely” thatproducers will see gas prices return anywhere near to $2 for atleast three to five years. He said $2 prices were “in the rear viewmirror” for gas producers.

Prompted by weaker physical prices and forecasts calling forwarming temperatures this week, traders in the natural gas pit atNymex had little choice but to push futures lower Friday as theycasually transferred long positions from the prompt contract to theback months. Slipping 6.6 cents on the day to finish at $2.785, theApril contract now sits just above trendline support on the dailychart, sources said.

FERC has conditionally approved a tariff proposal calling forPanhandle Eastern Pipe Line to provide a new hourly firmtransportation (HFT) service for gas-fired power generationfacilities, as well as for its other eligible customers.

Despite warming temperatures across much of the nation andforecasts calling for more of the same, natural gas futuresrebounded yesterday, as traders covered shorts amid heavilyoversold conditions and ahead of potentially “very bullish” storagedata to be released today.

FERC last week conditionally approved a tariff proposal callingfor Panhandle Eastern Pipe Line to provide a new hourly firmtransportation (HFT) service for gas-fired power generationfacilities, as well as for its other eligible customers.

Fueled by forecasts calling for cooler temperatures throughoutmuch of the country later this week, natural gas futures probedhigher in two distinct buying surges yesterday. The first push cameshortly after Monday’s lower open, when traders bid the Januarycontract to $2.50. However, those gains were erased almost entirelyby early afternoon, intra-day profit taking. But the bulls were notfinished, and after digging in their heels at $2.47, weresuccessful in pushing prices through $2.50 late in the session. TheJanuary contract finished up 6.3 at $2.509.