More on the state of natgas....This morning, PMT.UN did a press release indicating that the monthly distribution was going to be reduced. Their reasons are as follows.
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In recent weeks, North American natural gas storage inventories have trended significantly higher relative to historical averages and in particular have increased to levels equivalent to the historical relative highs reached in the summer of 2006. To date anticipated prolonged summer cooling demand in key gas consuming regions has failed to materialize and there also has not yet been significant tropical storm activity in the U.S. Gulf Coast region. Consequently, U.S. spot NYMEX natural gas prices have fallen approximately 20 percent from near US$8.00 per MMBTU in February of 2007 to approximately US$6.40 per MMBTU currently.
In Canada the increase in the value of the Canadian dollar has further amplified the negative impact on gas prices. Since AECO spot gas prices peaked at Cdn$7.90 per GJ on February 8, 2007, the Canadian dollar has strengthened 12 percent relative to the U.S. dollar and as a result, AECO gas prices have declined much more than those in the U.S.; 33 percent to their current level of Cdn$5.27 per GJ. As a result of the trend in gas storage inventories, weather and currency, PET remains cautious in its outlook with respect to near term natural gas prices.