Washington (Platts)--8Sep2008

With US oil and gas companies producing more and more natural gas, US gas
prices are headed for a "train wreck," Raymond James energy analyst
Marshall Adkins said Monday when he slashed his fourth-quarter price forecast
by one-third to $7.50/Mcf and his forecast for 2009 by 10% to $6.75/Mcf.

"The fact remains that US gas supplies are screaming higher at a
ridiculously high 8% annual growth rate," Adkins said. "Since gas demand
growth is not growing nearly as fast as supply growth, the US gas market is
still headed for a train wreck. Yes, we have had a meaningful pullback in
natural gas prices over the past two months, but there is no reason it cannot
get worse."

Adkins said he believes the market has an annual oversupply of 500 Bcf,
something that has contributed to the rapid closing of the year-over-year the
storage deficit. He predicts storage could end the heating season with 600 Bcf
more in the tank than last year.

With an average winter expected across the US this year and normal
economic growth, the US gas supply will exceed supply by 4.5 Bcf/d.

"Of course, it is possible that an extremely cold winter temporarily
diminishes the problem, but it would not solve the problem. The solution is
substantially lower natural gas prices," he concluded.