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OKLAHOMA CITY, March 24, 2004 -- C. H. Guernsey & Company economists have revised their net natural gas storage estimates based on updated withdrawal and injection forecasts through March 2004.
Donald Murry, Ph.D., vice president, and Zhen Zhu, Ph.D., GUERNSEY economist, today released that the stored natural gas level at the beginning of April will approximate 1,050 billion cubic feet (Bcf).
This estimated net storage level is higher than the storage level during the same 2003 time frame, which was 671 Bcf. This higher level is based on an estimated 49 Bcf net withdrawal for last week, a predicted 29 Bcf net withdrawal for the week ending March 26 and a 12 Bcf net injection for the week ending April 2.
Murry says a psychological barrier will not play a role in natural gas price.
"We do not believe the cushion will be very large, but we expect the level of gas in storage will stay above the psychological barrier of 1,000 Bcf," said Murry. "Despite the weather in the Northeast, our modeling shows high oil prices, spilling over into the natural gas market, have somewhat dampened consumption and sustained natural gas prices."
The GUERNSEY economists' predictions put the spring 2004, natural gas storage level in line with the five-year historical average of net stored gas at heating season end. This figure, which many analysts use as a benchmark, is 1092 Bcf.
The beginning of April is the symbolic end of the heating season, and is an important time to benchmark the level of natural gas in storage for many analysts. This is also the beginning of the seasonal natural gas injections to prepare for the following winter.
The stored gas level sets the optimal fill, summer injection goals for the following fall, and it signals the impact on the gas purchase price to store. April 2003's low storage level helped raise natural gas prices throughout summer 2003.
The U.S. Department of Energy will announce its estimate of the natural gas in storage for last week on Thursday this week.
Further natural gas information is available at http://www.chguernsey-econ.com.
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