Warn

For the sixth time in seven trading sessions, natural gas futures advanced higher yesterday amid technical bullishness, and as traders continued to grapple with the possibility that the year-on-year storage deficit—currently at 404 Bcf—will be difficult to trim this summer when gas is in high demand for electricity generation. The May contract led all months Tuesday, finishing 8.2 cents stronger at $5.559.

Wall Street analysts continue to predict a rapid storage refill this summer and warn of the potential for a significantly bearish reaction in the market in the short-term. Analysts at Salomon Smith Barney (SSB) yesterday reiterated projections earlier in the week by Lehman Brothers that lower demand because of high prices will lead to sharply steeper storage injections this spring.

Warm weather in its key market areas intensified a turbulentyear for Avista Corp., the company said last week, and its fourthquarter earnings will reflect it.

Don’t put your duck tape and plywood away just yet. Althoughthere’s been a lull so far in the hurricane season, the NationalOceanic and Atmospheric Administration (NOAA) and renowned ColoradoState University forecaster Dr. William M. Gray both still arepredicting a whopper season this year in the North Atlantic andCaribbean Sea during the peak period from mid-August throughmid-October.

Raymond James & Associates Equity Research group warnedclients this week a return to normal temperatures this winter couldbring a greater gas market surprise than expected. Winterconsumption spikes over the past two winters have trended downward,but that was because winter 1996/97 was nearly 5% warmer thannormal and last winter was nearly 9% warmer than normal, the firmnoted. Normal weather likely will bring a significant increase inconsumption and with it a significant increase in gas prices thiswinter compared to last.