World's Energy

03.10.2008 - [Neftegaz.RU] - Despite the damage inflicted by hurricanes Gustav and Ike to operations in the Gulf of Mexico, natural gas production this year is expected to reach the highest level seen since the mid-1970s. Wholesale prices should remain stable this winter as a result of high production, combined with a stagnating U.S. economy and a winter similar to last year the Natural Gas Supply Association said. "Federal forecasters anticipate this will be a slightly warmer than normal winter" with temperatures expected to be fairly comparable to last year, noted Patrick Kuntz, the Gas Supply Association's chairman. "However, this is the most difficult factor to predict, and the severity of winter weather may likely have the biggest single impact on the market," Kuntz said. 750 more wells are expected to be drilled this year than last year and twice as many as in 2002, the Gas Supply Association said. Gas production is expected to increase nearly 8 percent, in part due to large-scale development of "unconventional" gas production from shale and tight sands formations, according to a study conducted by Fairfax, Va.-based ICF International. Those expansions have helped offset production losses in the Gulf of Mexico, where the U.S. Minerals Management Service reports 46 percent of the gas production remained shut in, three weeks after Ike blew through. Gas demand this winter is expected to rise about 2 percent according to Energy Ventures Analysis. The nation will enter the heating season with a healthy 3.5 trillion cubic feet, the Gas Supply Association said, down 3 percent from last year's all-time high.