<i>Editor's note: <\/i>Energy Circuit<i> takes no responsibility for the accuracy of this forecast.<\/i> Readers of this publication will not be surprised to hear that high-flying natural gas prices are becoming political targets. In response to suspicions of market manipulation, Pat Wood, Federal Energy Regulatory Commission chair, assures us that ?you?d better believe we?re looking? at gas prices. Calls for stand-alone natural gas legislation next year mount. It was bound to happen. Gas prices shed nearly 90 cents on Wednesday, the last day of NYMEX trading for November, only to jump back up more than a dollar yesterday, closing at $8.68\/MMBtu. Prices in the spot market are approaching $8.00. The markets seemed surprised at the small increase in storage reported yesterday for the week ending October 22. The storage report was, however, in line with my own forecast based on colder weather and the lingering aftermath of Hurricane Ivan. Meanwhile, crude oil prices have begun to soften as profit-taking sets in, reinforced by strong oil storage reports. Continuing increases in gas prices while oil is dropping are sure to raise even more eyebrows. Gas prices are guaranteed to continue to fluctuate, and decreases will surprise no one. But with prices approaching $10\/MMBtu, politicians ignore them at their peril. The easiest response is to echo the industry mantra that environmental restrictions on expanded drilling are at fault even though few independent analysts support that claim. Calls for more subsidies?excuse me, I meant to say ?incentives??are next, no doubt. As economists know, market failures do occur, and we may be witnessing a rather spectacular example in the natural gas market. If markets cannot be relied upon to allocate this essential resource fairly and efficiently, what?s the alternative? Rationing and price controls?