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Natural Gas Demand Destruction

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  • Ron Patterson
    US natural gas gross production peaked in 2001 at 24,500,779 million cubic feet. This past year it was down to 23,410,226 million cubic feet. That is down
    Message 1 of 2 , Mar 2, 2006
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      US natural gas gross production peaked in 2001 at 24,500,779 million
      cubic feet. This past year it was down to 23,410,226 million cubic
      feet. That is down 1,090,553 million cubic feet, or 4.45 percent from
      the peak in 2001. Just about half of this drop was due to hurricanes
      Katrina and Rita (561,000 million cubic feet).

      However the important thing is that though gas production dropped
      dramatically last year, inventories, for this point in the season,
      are at their highest point in decades and prices are dropping like a
      rock. There is a very good reason for this phenomenon, demand
      destruction. Gas prices in the range of $15 have driven many
      commercial users out of business. Some have moved overseas where gas
      is much cheaper and some have simply gone out of business altogether.
      And now that gas prices are down again, most are not likely to come
      back. Henry Hub NG spot closed at $6.60 yesterday.

      Weekly Natural Gas Storage Report:
      http://tonto.eia.doe.gov/oog/info/ngs/ngs.html

      Natural Gas Withdrawals and Production:
      http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm

      Gross Withdrawals History (monthly):
      http://tonto.eia.doe.gov/dnav/ng/hist/n9010us2m.htm

      Gross Withdrawals History: (annual):
      http://tonto.eia.doe.gov/dnav/ng/hist/n9010us2A.htm

      Ron Patterson
    • David Blittersdorf
      The biggest reason is the 10th warmest winter on record. I guess you could call that demand destruction but if this summer becomes the warmest on record (or
      Message 2 of 2 , Mar 4, 2006
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        The biggest reason is the 10th warmest winter on record. I guess you could
        call that demand destruction but if this summer becomes the warmest on
        record (or even normal), we will have high prices again. Maybe next winter
        will be a "normal" winter which will be hard to cover with present natural gas
        production.

        The USA "dodged a bullet" this year on natural gas usage. Weather will be
        the huge deciding factor in natural gas pricing and supply in the next year or
        two unless our economy dives into a big recession.

        David Blittersdorf

        On 2 Mar 2006 at 14:47, Ron Patterson wrote:

        > US natural gas gross production peaked in 2001 at 24,500,779 million
        > cubic feet. This past year it was down to 23,410,226 million cubic
        > feet. That is down 1,090,553 million cubic feet, or 4.45 percent from
        > the peak in 2001. Just about half of this drop was due to hurricanes
        > Katrina and Rita (561,000 million cubic feet).
        >
        > However the important thing is that though gas production dropped
        > dramatically last year, inventories, for this point in the season,
        > are at their highest point in decades and prices are dropping like a
        > rock. There is a very good reason for this phenomenon, demand
        > destruction. Gas prices in the range of $15 have driven many
        > commercial users out of business. Some have moved overseas where gas
        > is much cheaper and some have simply gone out of business altogether.
        > And now that gas prices are down again, most are not likely to come
        > back. Henry Hub NG spot closed at $6.60 yesterday.
        >
        > Weekly Natural Gas Storage Report:
        > http://tonto.eia.doe.gov/oog/info/ngs/ngs.html
        >
        > Natural Gas Withdrawals and Production:
        > http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm
        >
        > Gross Withdrawals History (monthly):
        > http://tonto.eia.doe.gov/dnav/ng/hist/n9010us2m.htm
        >
        > Gross Withdrawals History: (annual):
        > http://tonto.eia.doe.gov/dnav/ng/hist/n9010us2A.htm
        >
        > Ron Patterson
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        > Drop me (Tom Robertson) a note at t1r@...
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        David Blittersdorf
        Founder/CTO
        NRG Systems, Inc.
        110 Riggs Road
        Hinesburg, VT 05461 USA
        Tel: 802-482-2255
        email: davidb@...
        Web:http://www.nrgsystems.com
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