Point Roberts, WA; Delta BC (PRWEB) August 4, 2006
http://www.NaturalGasStocks.com (NGS) and http://www.OilandGasStockNews.com (OGSN), global investor websites for the natural gas, energy and oil industries, review the impact that the high summer temperatures potentially will have on natural gas prices. As a result of the recent heat wave more and more consumers are turning to their air conditioners for relief, placing additional pressure on the power grid. With natural gas used to power a significant portion of U.S. power plants, the increased demand for electricity has the potential of overcoming the supply surplus created by a mild winter and placing upward price pressure on natural gas moving forward.
As a result of the severe heat wave felt last week on the West Coast and recently across the Midwest and Northeast, the U.S. has been faced with blackouts leaving thousands without power and making conservation a necessary defense against further outages. As the pressure to the power grid continues, many are speculating on the impact this will bring to the natural gas market and its overall pricing moving forward. In the short term, the prices have escalated generating its largest gain in over a year, but the impact on the price of natural gas as we continue throughout the summer is yet to be determined as many variables remain.
According to Paul Branagan, President and CEO of Petrol Oil and Gas Inc. By this time last year the energy markets were already impacted by 3 hurricanes ripping through the Gulf with the worst, Katrina, yet to show itself. This year the marketers are now influenced by uncertainties in global political issues, the extreme heat waves that have been devastating the highly populated areas of the Midwest and Northeast and the yet to occur hurricane season. So to no ones surprise these significant concerns have marketers nervous and responding by raising the price of natural gas futures which incidentally appears almost insensitive to falling but nonetheless record natural gas storage levels.
With all of that said, the market may find considerable volatility over the next month as some of these concerns begin to resolve themselves and the real impact on supply and demand can be assessed and quantified. Thus all the producers like Petrol can do is forge ahead as fast as possible trying to assure the demand side that supply will be available given their worst fears, adds Branagan.
With the hurricane season underway, one that many have forecasted to be highly active, there is the potential for further escalation of natural gas supply pressures and a greater likelihood for future price increases leaving us once again at the hands of Mother Nature. With much uncertainty, many industry experts expect volatility to continue.
Paul Flemming, Energy Security Analysis Inc.s Director, Power and Gas Services, describes, The key word is volatility. Theres a sense of near term demand that has been driving the market right now. Lasts weeks draw was the first time this has happened during this part of the season. We were expecting a summer rally, but this is coming on a bit stronger than expected. Despite the last few weeks of solid demand we are looking for full storage by the end of the season.
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Source: NaturalGasStocks.com, Petrol Oil and Gas