<i>Storage is the main price driver for natural gas. Storage also provides the most current and accurate snapshot of the natural gas market's supply and demand. The following data are from the U.S. Energy Information Administration.</i> Energy Circuit<i> takes no responsibility for the accuracy of this forecast.</i> As projected last week, continued record cool weather extending as far south as Texas led to gas storage buildups. Another large build is expected as cool weather continued this week. The reported build was 14 bcf less than expected, perhaps due to Hurricane Charley. Prices changed little during the week, closing yesterday at $5.51/MMBtu. Oil prices continued to set records, despite President Hugo Chavez?s landslide victory in Venezuela?s recall election. Signs of political stability had been expected to ease fears of export disruptions, but prices increased $3.20 for the week, closing yesterday at another new record high of $48.70/bbl. In the last two years, North American gas production has not responded to increasing prices, leading me to expect gas prices to go higher still. Global oil markets now are in a similar situation, and I look for oil prices to continue climbing as long as production fails to respond. <table cellspacing= 1 cellpadding = 1 border=1><tr align='center'><th colspan='5'><b>U.S. Natural Gas Storage</b> (in billion cubic feet)</th></tr> <tr align='center'><td>Date (2004)</td><td>Stocks</td><td>Change from prior week</td><td>Forecast change</td><td>Prior 5-year average stocks*</td></tr> <tr align='center'><td>July 23</td><td>2,297</td><td>+70</td><td>+68</td><td>2,227</td></tr><tr align='center'><td>July 30</td><td>2,380</td><td>+83</td><td>+95</td><td>2,284</td></tr><tr align='center'><td>Aug. 6</td><td>2,452</td><td>+72</td><td>+72</td><td>2,338</td></tr><tr align='center'><td>Aug. 13</td><td>2,530</td><td>+78</td><td>+92</td><td>2,397</td></tr><tr align='center'><td>Aug. 20</td><td></td><td></td><td>+93</td><td>2,456</td></tr></table> * Historical averages may differ slightly from those reported by USEIA.