Guernsey Says Low Temperatures and High Prices Help Natural Gas

06.10.2003

OKLAHOMA CITY – C. H. Guernsey & Company economists, Donald Murry, Ph.D. and Zhen Zhu, Ph.D., upwardly revise their forecast of the November 2003 gas storage level to 2,904 billion cubic feet (Bcf).

This increase is because cool weather in key parts of the country and high prices have dampened consumption in recent weeks; offsetting lower production levels.

The economists also estimate the level of natural gas injected into storage last week was 109 Bcf, which results in a total gas in storage of 1,308 Bcf when added to the U.S. Department of Energy gas storage level estimate.

“We presently estimate the net gas injections between now and November will be higher than they have averaged for the last five years, but this is not enough gas in storage to remove anxiety from the natural gas market,” said Murry.

He also points out that if the injection levels only match the injection rate of the past five-years, this results in a very low 2,597 Bcf in storage going into the heating season.

“Although summer weather is the principal determinant and the prospects are not promising for consumers, we believe the storage outcome is more favorable than expected by those who are only watching the levels of historical projections. It appears there is a consumption response to the current high prices,” Murry added.

More details of GUERNSEY's natural gas storage estimates can be found at www.chguernsey-econ.com.

C. H. Guernsey & Company, celebrating its 75th year of business, offers the highest quality engineering, architectural and consulting solutions to clients in the United States and abroad. GUERNSEY has its headquarters in Oklahoma City with offices in Colorado, Florida, Georgia, Hawaii, Illinois and Texas.

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