Wary

Gas market bulls should be wary of an upcoming trap, according to Energy Security Analysis Inc. (ESAI). Despite the 23-cent jump to $3.305 by the near-month gas futures contract on the New York Mercantile Exchange last Monday, the Boston-based consulting firm predicted prices would tumble back to between $2.25-$2.50 in the near term as storage holders begin to sell off inventories to take advantage of higher forward prices. Although April futures backtracked some on Tuesday and Wednesday of last week, they soared 32 cents last Thursday to $3.431 before losing a little ground on Friday.

Gas market bulls should be wary of an upcoming trap, according to Energy Security Analysis Inc. (ESAI). Despite the 23-cent jump to $3.305 by the near-month gas futures contract on the New York Mercantile Exchange Monday, the Boston-based consulting firm is predicting prices will tumble back to between $2.25-$2.50 in the near term as storage holders begin to sell off inventories to take advantage of higher forward prices.

AEC said it has locked in fixed prices for the first nine months of 2002 on 600 MMcf/d of its gas production, or about 30% of its forecasted gas sales. In Canada, 370 MMcf/d was locked in at an average AECO equivalent price of C$3.80/Mcf, and in the U.S. Rockies, 230 MMcf/d was sold forward at an average Opal equivalent price of US$2.61/Mcf.