Henry Hub spot gas price falls to $4.90/MMBtu, lowest in 2 years

Washington (Platts)--14Sep2006

Spot natural gas prices along the US Gulf Coast fell as much as 55 cents
Thursday from Wednesday's averages, following an October NYMEX gas futures
contract that began tanking after the Energy Information Administration's
estimate of gas storage injections came in well above industry expectations.

One of the worst hit was Henry Hub, which fell to around $4.90/MMBtu upon
the report's release, before it declinead to the mid-$4.80s/MMBtu a few
minutes later, a low not seen since mid-November 2004. The pricing point came
off more than 30 cents from Wednesday to average in the mid- to high
$5.00s/MMBtu.

"Pretty much all the pipes started out at one price and just went down,"
one Gulf trader said. "They tried to recover, but once the storage number came
out it pretty much killed it."

Another Gulf trader said buyers who were looking for bargains elsewhere
came up empty-handed. "There are no signs of life in this market; there was
nothing," the trader said.

Transcontinental Gas Pipe Line zone 3 fell more than 35 cents to average
in the mid- to high $5.00s/MMBtu, as the pricing point saw a 3-cent discount
to Henry Hub after coming off flat Wednesday.

Florida Gas Transmission's zone 3 dove 55 cents to average around
$5.20/MMBtu, amid thin trading and sluggish demand.

In Texas, the Houston Ship Channel dropped some 40 cents to average in the
mid- to high $4.90s/MMBtu.

--Samantha Santa Maria, samantha_santamaria@platts.com

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