Tightness

The tightness of supply and demand has set the stage for “sustainable” $3.50-$4.00/Mcf natural gas prices throughout 2003, but a lack of economically drillable prospects may lead to more mergers as producers look for production and reserve growth, according to a 2003 oil and gas industry forecast.

The tightness of supply and demand has set the stage for “sustainable” $3.50-$4.00/Mcf natural gas prices throughout 2003, but a lack of economically drillable prospects may lead to more mergers as producers look for production and reserve growth, according to a 2003 oil and gas industry forecast.

Despite the record rig count, gas production isn’t picking upspeed the way many expected, according to Robert Morris of SalomonSmith Barney. Gas production decline rates are extremely high andthe United States will be lucky to see production growth of 3% thisyear, Morris said during a conference call Friday.

Despite the record rig count, gas production isn’t picking upspeed the way many expected, according to Robert Morris of SalomonSmith Barney. Gas production decline rates are extremely high, andthe United States will be lucky to see production growth of 3% thisyear, Morris said during a conference call Friday.

Rising temperatures again will mean growing tightness in powermarkets across the country this summer. While industry players havemore experience dealing with shortages and constraints, a trulyefficient market with ample power supply depends upon regulators,according to industry executives.

Supportive physical prices and concerns over supply tightnesstook center stage yesterday in the natural gas pit at Nymex andthat gave bulls the impetus to post the seventh straight priceadvance. The September contract finished up 2.7 cents at $2.748after notching both a higher high and a higher low for the session.Estimated volume was 77,940 contracts.