<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. On a trial basis, </i>California Energy Circuit <i>will publish national gas storage data reported by the U.S. Energy Information Administration. We will also include the estimate of the author, Dr. Rich Ferguson, Center for Energy Efficiency and Renewable Technologies research director, of the following week?s storage level. This publication takes no responsibility for the estimates? accuracy.</i> <b>Comments:</b> USEIA reported a surprisingly large increase in storage levels of 102 bcf for the week ending June 4. Whether this indicates a sustained increase in supplies or is merely a blip on the downward trend remains to be seen. Natural gas prices have dropped to around $6/MMBtu, following the crude oil market. In response to OPEC?s vow to increase production, the price of oil has dropped 10% since its high last week. A little history to put things in perspective: Near the end of the year 2000, natural gas prices spiked in response to unusually low supplies. The increase in prices resulted in supplies relative to demand recovering in a matter of a few months. Early in 2003, prices spiked again, but supplies have struggled to regain sustainable levels, despite record levels of LNG imported. After the 2000-01 price spike, prices fell back to the $2/MMBtu range. Since early 2003, however, prices have remained stubbornly high. Supplies slowly regained sustainable levels by the end of last year but since then have begun to decline again. If gas prices around $6/MMBtu cannot ensure adequate levels of supply, what price will? <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>May 14</td><td>1,388</td><td>+85</td><td>+101</td><td>1,418</td></tr><tr align='center'><td>May 21</td><td>1,477</td><td>+89</td><td>+89</td><td>1,493</td></tr><tr align='center'><td>May 28</td><td>1,564</td><td>+87</td><td>+86</td><td>1,590</td></tr><tr align='center'><td>June 4</td><td>1,767</td><td>+102</td><td>+90</td><td>1,680</td></tr><tr align='center'><td>June 11</td><td></td><td></td><td>+82</td><td>1,767</td></tr></table> * Historical averages may differ slightly from those reported by USEIA.