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Enron Mail |
Enron talking points....
Factors Leading to Higher Natural Gas Prices this Winter ? Demand for natural gas has increased mainly due to consumption in the power generation market and strength of the manufacturing sector in a booming economy. ? Natural gas production and drilling has fallen off since 1998 due to low prices that reached far below $2 per MMBtu. In 2000, deliverability utilization will be over 95 percent. ? While drilling activity has risen sharply (as much as 50% from last year), the production from this increased drilling activity typically is not available for several months. According to the AGA, supply production continues to run 16% below last year's levels. ? The past three winters have been "warmer than normal" winters in the Midwest and much of the United States and Canada, artificially masking the usual consumption of natural gas under "normal" weather situations. ? Very warm weather during this summer has caused a significant demand increase for natural gas in the electricity generation sector thereby competing for gas storage injections in the marketplace and driving prices upward. ? U.S. storage inventory levels are lower than historical average levels from the past six years, according to the AGA. The cost of storage inventory at this summer's strong prices could eliminate the price advantage traditionally experienced in the winter. ? Other heating fuels like propane and heating oil are also showing significantly higher prices and potentially lower stocks this winter than last.
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