The working gas in storage estimates on lower and upper bounds are seasonally adjusted figures. The reference point for the deviations is the mid point of the lower and upper bounds.

• Storage serves as a buffer supply that operators rely on to satisfy demands at peak.

• Deviations in storage volumes from the mid point generally relate inversely to corresponding price movements.

• In 1995/96, relatively ample early storage levels, along with significant drawdowns served to limit price increases in the wellhead markets. A later slide shows that this storage utilization strategy in the 1995/96 heating season contributed to residential prices that were unusually low for the 1990s.

• A very different situation developed in 1996/97. There were relatively low levels of working gas in storage as the heating season began because of generally higher wellhead gas prices during 1996 in combination with low futures prices for the 1996/97 heating season. The lessened supplies available to the market throughout the heating season resulted in a price surge, which only diminished as weather warmed.

• Yet a third scenario was played out in 1997/98. Storage levels were close to mid point for the beginning of the heating season, yet the commodity prices (measured at the wellhead) had been persistently high since mid year. The limited demand due to warm El Ninó temperatures and the ample supplies in storage led to prices that declined through most of the heating season. The relative gas abundance signaled by the low prices led to low reliance on storage volumes, and so stock levels ended well above normal by March 1998.

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