Figure 5. US natural gas spot prices. Several factors – reduced demand due to fuel switching and conservation, increasing supplies from new drilling, and mild weather - have combined to reduce market worries resulting in a steep decline in spot gas prices since they peaked in December, 2000. Record injection rates restored working gas storage to 2.138 Tcf during the second week of July. This is almost 7% above the 6-year average. Less than average injection rates now will be adequate to fill storage to the desired 3Tcf level before the winter heating season. Plots of May 8 and July 19, 2001, Gas Futures indicate the weakening market perception of prices through 2002. Unless there is a marked change in the weather, it looks as though natural gas could average about $3.90/Mcf during 2001 (down 9% from 2000) and $2.75 - $3.50 (or lower!) during 2002.