Disruptions

Even with the hurricane-related disruptions from Gustav and Ike in September, prompt Henry Hub prices have remained below $8/MMBtu since the end of August, and as Gulf of Mexico production slowly recovers, supply strength elsewhere, economic weakness and a warm winter may pull winter gas prices below $7 by early next year, a team of energy analysts predicted Tuesday.

While domestic natural gas production activity and storage remain at strong levels despite hurricane-induced disruptions and the global financial meltdown, gas consumers could wind up paying 10-30% more in home heating costs this winter, according to the American Gas Association (AGA).

More than enough natural gas is surging through pipelines and into storage today and barring any weather disruptions, prices should “significantly come down by the end of the year and stay down,” the CEO of Bentek Energy LLC said Friday. However, the gas supply/demand picture remains a “vicious cycle,” and another price spike will surely follow — and sooner than some might think.

More than enough natural gas is surging through pipelines and into storage today and barring any weather disruptions, prices should “significantly come down by the end of the year and stay down,” the CEO of Bentek Energy LLC said Friday. However, the gas supply/demand picture remains a “vicious cycle,” and another price spike will surely follow — and sooner than some might think.

An event that temporarily dropped gas prices to lows of 90 cents in the Rockies and led to widespread gas flow disruptions was over in a matter of days last week. With help from Kinder Morgan, EnCana and others, Wyoming Interstate Co. (WIC) managed to resume full pipeline operations late Thursday afternoon, five days after the driver of a bulldozer working on the Rockies Express pipeline caused a pipeline explosion on WIC about 10 miles south-southwest of Cheyenne, WY.

Due in part to the energy infrastructure damage and disruptions along the Gulf Coast in the aftermath of last year’s hurricanes, FERC anticipates that applications seeking to build 14 new natural gas storage projects will be filed over the next five years, the agency told Congress and the Bush administration Friday.

Due in part to the energy infrastructure damage and disruptions along the Gulf Coast in the aftermath of last year’s hurricanes, FERC anticipates that applications seeking to build 14 new natural gas storage projects will be filed over the next five years, the agency told Congress and the Bush administration Friday.

Despite the dramatic destruction and disruptions caused by Hurricanes Katrina and Rita last year, energy companies overall have weathered the storms from a credit standpoint, according to a report by Standard & Poor’s Ratings Service (S&).

The trend toward higher natural gas prices in recent years has largely been due to market forces and weather disruptions, namely Hurricanes Ivan, Katrina and Rita in 2004 and 2005, an official with the Governmental Accountability Office (GAO) told a Senate panel that is investigating price volatility in the natural gas market.