By Duncan Sutherland - Exclusive to Gas Investing News

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Natural gas has been hit hard lately, losing approximately 40 per cent of its price in the last one month itself; a number eclipsing even the oil price collapse.

A report in the business section of the Globe and Mail has a an in-depth article ^[2] detailing how the confluence of the 'cooler than expected' weather and a "calm" hurricane season have allowed gas shorters to beat widespread projections. Writer John Heinzl details how “there's plenty of gas to go around”. This sentiment is being echoed in numerous sources, with some going so far as to say that the U.S. natural gas market ^[3]is currently "massively oversupplied.” The incredible growth of the American Barnett Shale projects has analysts projecting U.S. output at almost 22 trillion cubic feet, which would be the second largest annual production ^[4] in U.S. history. With the EIA predicting a 9 per cent supply increase but only a 3 per cent demand increase, surplus gas seems inevitable. The problem is that import infrastructure has been in the midst of a long construction boom, with more forthcoming in Canada's Atlantic provinces.

The oversupply is looming, and import terminals are beginning to file for export permits ^[4] with the U.S. Energy Department. This in itself is not a bad thing, as European consumers may be willing to pay a premium for non-Russian gas, especially given the recent developments in the Caucasus. It should be noted that this view is not unanimous. XTO Energy (NYSE:XTO) CEO Bob Simpson has vehemently repudiated such a notion, as reported here ^[5] in the Fort Worth Business Press.

By the end of the week, a piece should be up on Gas Investing News analysing the potential for Arctic gas in the wake of the United States Geological Survey report ^[6] . Those interested in an analysis of what the Russo-Georgian conflict means for the Caspian Sea energy and Caucasian trans-shipment over the long term can read it on our sister site www.crudeinvestingnews.com ^[7].

Iran has completed a treaty agreement ^[8] with the Sultanate of Oman. It is expected to route 1 billion cubic feet of natural gas to Oman for local consumption, and liquefaction for export. Though Oman's gas reserves are not especially significant, it does have a well-developed export infrastructure. Chief export markets for the gas are expected to be the nearby, gas-hungry nations of Pakistan and India. Both lack in sufficient domestic sources. As the two countries share a maritime border in the Persian Gulf that straddles a two trillion cubic foot gas field, this agreement should be regarded as a first step towards cooperation in the development thereof.

Company news:

Allied Resources (OTC:ALOD) experienced a 78 per cent increase ^[9] in oil and gas revenues in the second quarter, though the company remains extremely small.

Williams Companies, Inc (NYSE:WMB) has expressed happiness on the fact that the Federal Energy Regulatory Commission has approved ^[10] the Sentinel pipeline expansion plan. The current Transco pipeline starts in Texas, and is a major supply link for the states of New York, New Jersey and Pennsylvania. Foreseeing demand growth in the Northeast, Williams is to enlarge its capacity ^[11] in New Jersey and Pennsylvania.