<i>Editor’s note: </i>Energy Circuit<i> takes no responsibility for the accuracy of this forecast.</i> If you bought a contract at the close of trading yesterday for natural gas to be delivered next January, you paid an astounding $9.22/MMBtu. Gas to be delivered next month cost you $7.70/MMBtu. A few years ago, the price was about $2/MMBtu. As discussed here last week, it is not unreasonable to suspect foul play. But ask yourself the following questions: Am I using less gas because the price is high? Less electricity? If you?re like most folks, the answer is no. Despite the remarkable ups and downs in gas prices, U.S. gas consumption has remained virtually unchanged over the last four years. The U.S. has not increased consumption of natural gas, but neither have we conserved in response to high prices. Once upon a time, supplies of gas would have flooded the market at $3/MMBtu. But today, even though consumption has not changed significantly, we have little surplus even at $7/MMBtu. As long as you and I continue to be willing to pay higher prices rather than burning less gas, we can expect the price to remain high. With supplies limited, only decreases in consumption can keep prices from going even higher in the next few years. Gas prices will continue to fluctuate, of course, and market traders will continue to wager on these movements. Many analysts expect a bout of profit taking to increase selling and drive prices down. But if this week?s activity is any indication, a drop of a dollar or so will result in prices that look like a bargain, and buyers will step in to bid the price back up. The dynamics of U.S. gas markets are reflected in global crude oil markets, where prices have flirted with $55/bbl this week despite efforts by the International Energy Agency to talk prices down. According to the Financial Times of London this week, high prices may be causing production in some regions to decrease! Many countries have production-sharing agreements with oil companies that can be satisfied by producing less oil at higher prices. If owners of remaining supplies can make more money by pumping less oil or gas, they will?it is in their economic interest to do so. The outlook for prices is ominous.