eia latest forecast pricing supply winter eia predicts supply shortfall linger winter energy information administration said yesterday september short term energy outlook projecting natural gas prices wellhead increase 87 winter october march compared last winter residential prices gas expected rise average 27 compared last year entire year average wellhead price natural gas projected 3 40 mcf highest annual wellhead price record inflation adjusted terms would highest annual average price since 1985 short term supply constraints currently hindering industry ability meet storage power generation demand time likely continue heating season eia said storage levels could end 8 five year average 3 000 bcf start winter net injections continue 10 historically average rates remainder refill season effects increased drilling gas expected appear form significantly increased production next heating season according agency report continuing maintain conservative view possible increases domestic gas production 2000 2001 assumed increases 0 5 1 respectively year next eia report stated hand u natural gas rig count aug 25 recent high 794 rigs exploration production budgets many natural gas producers expected increase sharply 2000 2001 spurred higher prices greatly improved current expected revenues producing assets also positive side data texas railroad commission suggest may year 2000 gas production increased slightly 0 4 signifies turnaround however modest key producing region high gas drilling rates including record setting pace deep offshore gulf mexico confirm increasingly positive results domestic gas production way imports projected rise 12 next year primarily 1 35 bcf alliance pipeline coming line next month meanwhile demand outlook remains bullish 4 2 annual growth 2001 however forecast revised downward 2 5 growth higher expected natural gas prices industrial sector leading sector demand increases 2000 9 3 electric utility demand expected decline 4 0 primarily power plant sales power generation sector whole gas demand expected grow 6 5 year 1 5 2001 eia said reduced growth rate next year largely due reversal relative prices fuel oil natural gas began august fuel oil gaining price advantage gas prices continued rise gas demand winter expected 5 7 compared last winter weather normal normal weather implies 12 rise heating degree days compared last winter