Huntsman Calls Latest Natural Gas Price Surge
Outrageous and Unnecessary
Wednesday October 26, 1:49 pm ET
THE WOODLANDS, Texas, Oct. 26 /PRNewswire-FirstCall/ -- Natural gas prices surged $1.33/mmbtu on the New York Mercantile Exchange (NYMEX) yesterday, a move that will cost the U.S. economy in excess of $26 billion on an annualized basis. Analysts said the price spiked because of weather forecasts of a cold winter in the Northeast.
Peter R. Huntsman, President and CEO of Huntsman Corporation says the huge price run-up, that will negatively impact every U.S. homeowner and consumer, was "outrageous and unnecessary."
"Natural gas futures trading, which influences the price that all consumers must pay, remains badly out of control," said Mr. Huntsman. "Government statistics show that demand for natural gas has fallen for five consecutive years. Production continues to outpace demand. The U.S. has the third highest amount of gas in inventory in history for this time of year, despite two major hurricanes. And yet we continue to have the world's highest and most volatile natural gas prices. We are forced to endure massive price spikes. Why? Simply because the trading of natural gas futures on the NYMEX is out of control."
Mr. Huntsman noted that the last time the U.S. had this amount of natural gas in inventory at this time of year was 2001. Demand then was higher than it is today. And the price was $2.71/mmbtu.
"Natural gas prices were shamefully and unnecessarily high even before Hurricanes Katrina and Rita blew into the Gulf," says Mr. Huntsman. "These prices are badly hurting homeowners, farmers and consumers of every kind. They have cost, and continue to cost, the manufacturing sector of the U.S. economy tens of thousands of jobs. The only ones who are profiting are NYMEX traders and, of course, the Exchange itself whose rules promote price volatility."
Mr. Huntsman says the Company fully supports those who are calling for increased natural gas production and improvements in the gas delivery infrastructure. But, he says, natural gas pricing is another element of the energy crisis that cries out for attention. He says the Company continues to push for legislative action to restore reason and sensibility to natural gas futures trading, including meaningful stops in trading that would have precluded yesterday's price spike. The Company is also advocating more transparency in gas trading and increased penalties for those who attempt to manipulate the price, among other measures.
"I noted with satisfaction that 14 members of the House of Representatives yesterday signed a letter advocating many of the reforms we are seeking," says Mr. Huntsman. "I applaud their concern for U.S. consumers and hope other of the nation's lawmakers will join their efforts."
Huntsman is a global manufacturer and marketer of differentiated and commodity chemicals. Its operating companies manufacture basic products for a variety of global industries including chemicals, plastics, automotive, aviation, footwear, paints and coatings, construction, technology, agriculture, health care, textiles, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging, and later, rapid and integrated growth in petrochemicals, Huntsman today has 11,300 employees, 57 operations in 22 countries and had 2004 revenues of $11.5 billion.
Statements in this release that are not historical are forward-looking statements. These statements are based on management's current beliefs and expectations. The forward-looking statements in this release are subject to uncertainty and changes in circumstances and involve risks and uncertainties that may affect the company's operations, markets, products, services, prices and other factors as discussed in the Huntsman companies' filings with the Securities and Exchange Commission. Significant risks and uncertainties may relate to, but are not limited to, financial, economic, competitive, environmental, political, legal, regulatory and technological factors. Accordingly, there can be no assurance that the company's expectations will be realized. The company assumes no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.
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