Weather Will Rule (Natural) Gas Prices in '07 (Houston Chronicle)

[jpak]

http://www.chron.com/disp/story.mpl/ap/fn/4394246.html

WASHINGTON — The U.S. natural gas market is well supplied at the start of 2007, but the outlook is for continued high prices, analysts said, especially if temperatures are below normal this winter.

"Weather is everything," said Ron Denhardt, an analyst at Strategic Energy and Economic Research Inc. in Winchester, Mass.

As more natural gas gets burned to heat homes during winter, supplies available to produce electricity are diminished for the remainder of the year, especially during the peak summer demand. This can drive up prices for natural gas and electricity.

Other key variables for the natural gas market include: economic growth, which will affect industrial demand; the price of oil, which influences the cost and consumption of fuels that compete with natural gas; and the rate at which coal-fired power plants are run, since natural-gas plants are an important alternative source of electricity.

<more>

[liberal N proud]

1. Here is how it works - If the winter is extremely cold the price will increase

But if the weather is unseasonably warm, the price will increase.

One because the demand and the other because of over supply, either way they will screw us.