Title: Searching for the Bottom
URL(s):

http://www.cera.com/eprofile?u=35&m=2929;


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GAS PRICES CONTINUE DOWNWARD DRIFT--HIGH STORAGE, LOW DEMAND

While warm weather keeps heating loads low, the key driver in natural gas
markets continues to be the looming storage surplus. Weather may provide some
short-lived price spikes in February, but until real evidence of the
anticipated decline in US supply appears, prices will feel continued downward
pressure from record-high storage inventories. The projected February average
price is $2.10 per MMBtu at the Henry Hub.

* March storage inventories will end at record high levels. Ample gas remains
to keep prices low until a rebounding economy and declining supplies can
provide a lift.

* With return to a normal weather, strong industrial loads will boost overall
gas demand slightly over last year's levels.

* Diminishing weather-related support and high western storage inventories will
drive widening discounts to the Henry Hub in the western producing areas, while
weak demand and high storage will limit premiums in the East.

**end**

Follow above ULR for complete CERA Monthly Briefing (7 printed pages).

E-mail Category: Monthly Briefing
CERA Knowledge Area(s): North American Gas



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