US gas prices tied increasingly to oil, global demand: analyst

London (Platts)--6Jun2005

The days of domestic fundamentals serving as the only influence over natural
gas prices "are over" as money managers turn increasingly to energy
commodities to boost their portfolio returns and the US begins to compete for
global supplies of liquefied natural gas, David Sobotka, president of Merrill
Lynch commodities, said Monday. 

In remarks delivered at Interchange Energy's LDC Forum in Atlanta, Sobotka
said investors who previously focused primarily on equities such as pension
funds and insurance companies will dramatically alter forward curve natural
gas prices over the next few years as paper demand for natural gas increases.
"This trend is likely not only to continue, but to accelerate" and "will only
add to the bullish bias," in gas prices, Sobotka added. Accordingly, the
market will see more price movements that are difficult to explain based on
existing fundamentals.

This story was originally published in Platts Natural Gas Alert
http://naturalgasalert.platts.com

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