New York (Platts)--18Jan2008

Despite assertions in the market to the contrary, winter will remain the
premium price season for natural gas in the coming years, analysts with
Barclays Capital said.

Michael Zenker and George Hopley said winter premiums both for the
current winter and for future winters "have been on a steady pullback over
the past few months." While some market observers have interpreted that trend
to indicate that summer is becoming the high-price season, "our view is that
there are strong fundamental reasons why winter has, and will continue to be,
the premium price season."

The analysts explained that fundamental factors late in 2007--including
relatively mild weather and record-high storage levels--led to the current
softness in the winter premium. Moreover, "winter premiums began to move well
above historical levels beginning in July 2004, and have not returned to
pre-2004 levels," they said. "In this context, the pullback in the winter
premium is simply a retreat to earlier levels."

The analysts also maintained that "there is no steady state level for the
winter spread," saying that it instead reflects an insurance premium for
winter gas, "especially for those who must buy gas during the winter to meet
customer needs no matter what the price.

"This inelastic buying, in combination with shifting perceptions about
the level of available supply in any given year, suggests to us that the
winter premium will move up or down with the market's collective view on
winter risk," the analysts said.