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5 November, 2003 - A record-fast build of natural gas working supplies and an expected mild winter won't be enough to keep prices down, a US government official warned Wednesday.
"We're certainly going to see higher prices for consumers," Guy Caruso, head of the Energy Information Administration, the statistical arm of the U.S. Department of Energy, said at a London oil conference.
Last year, gas prices spiked as high as $7 a million British thermal units because of a supply squeeze, causing worries about slowed economic growth.
Caruso said prices would average $4.90 a million BTUs this year, and would fall a bit next year to around $4 a million BTUs because of falling demand and slightly increased supply.
"We're cautiously optimistic in the short run," about gas supplies meeting demand, he said.
But he said continued price volatility would slow investment in the sector and needs to be monitored. Gas supplies are back within normal range after falling off sharply last year, he said.
Caruso said the agency was revising downward how much gas it thinks Canada will supply the US in its annual 25-year outlook report. Originally, the EIA had projected a growing role for Canada, but exports fell off last year.
"Our expectations for Canada are down," he said. "It certainly will be lower than last year."
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