UPDATE 1-POLL-US natgas prices seen spiking 25 pct in 2008

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By Joe Silha

NEW YORK, April 10 (Reuters) - A cold winter in the United
States this year and sagging imports of liquefied natural gas
have prompted industry analysts to predict near record high gas
prices in 2008, according to a Reuters poll released on
Thursday.

"It was a cold winter, oil prices have been high and LNG
imports have been low. Put it all together, and it's had an
impact (on prices)," said Stephen Smith of Stephen Smith Energy
Associates, a Mississippi-based consulting firm.

The Reuters poll of 25 industry experts showed estimates
for spot prices in 2008 at Henry Hub, the benchmark U.S. supply
point in Louisiana, averaged $8.69 per mmBtu, a 25 percent gain
from a $6.95 average last year and just below the all-time
yearly average high of $8.81 set in 2005.

Price expectations this quarter for 2008 were much higher
than those received last quarter, when analysts estimated a
$7.30 average.

INVENTORIES KEY

Gas inventories started the heating season at record highs
above 3.5 trillion cubic feet, but the coldest U.S. winter in
seven years forced utilities to pull nearly 2.3 tcf from
storage, or 10 percent more than normal, and helped ratchet up
the price outlook for this year, analysts said.

The steady decline in stocks during the heating season
drove Henry Hub prices to a record first quarter average of
$8.41, according to Reuters data, and most analysts see the
supply-demand balance as fairly tight this year.

Last autumn, mild winter forecasts had most analysts
expecting storage to end the heating season near 1.6 tcf, but
as chilly weather kicked up heating demand, stocks finished the
heating season at about 1.24 tcf, near normal for the period
but well below last March's ending inventory of 1.566 tcf.

Utilities and large industrial firms build up inventories
from April through October to meet peak winter heating needs.

Lower storage at the start of the stock-building season
will mean utilities have less bargaining power as they labor to
get inventories back to a comfortable 3.4 tcf by Nov. 1.

"The outlook for summer is on a whole different platform.
Looking at the summer ahead with 1.2 tcf in storage is a lot
different than with 1.5 or 1.6 tcf in storage," said Darren
Horowitz, energy analyst at Raymond James in Houston.

OTHER KEY FACTORS

Analysts also said imports of LNG, which hit a record 770
billion cubic feet in 2007 and eased the task of building
stocks last year, were not likely to come anywhere near that
level in 2008, further tightening supply.

U.S. LNG imports last year averaged about 2.1 bcf per day,
but so far in 2008, the pace has slowed to less than 1 bcf
daily and total imports are lagging last year by about 100 bcf.

While the rate should pick up some this spring, delays in
new liquefaction capacity, a huge nuclear plant shutdown in
Japan and a potential drought in Spain will make it tougher to
attract global spot supplies unless U.S. prices remain high.

Finally, some analysts said natural gas exports from Canada
could be down by as much as 1 bcf a day this year.

Canada normally ships more than 10 bcf a day of natural gas
to the United States, meeting about 16 percent of total U.S.
needs, but declining production in western Canada and rising
demand there should mean less gas available for export.

With crude oil prices hitting another record high this week
above $112 a barrel and expected to average $90 this year,
analysts said it will be difficult for gas prices to back off
much since gas is already cheap relative to crude.

STRONG PRODUCTION GAINS

But some analysts note that domestic production is on the
rise and expected to far outpace demand growth this year.

Two years ago, some experts were touting the "peak gas"
theory - that domestic producers were in a losing struggle to
increase output - but strong gains from deepwater wells in the
Gulf of Mexico and unconventional supply sources like shale gas
have kept output growing at a brisk pace.

EIA expects output from the nation's gas wells to be up
about 3 percent this year, while U.S. consumption will rise by
just 1 percent and could come in lower if the U.S. economy
slides into recession.

"There are new pipeline projects coming on line, there's
going to be additional shale gas, and demand growth should be a
little softer because of recession. The balance this year is
not much tighter than last year," said Kevin Petak at
consultants ICF International in Virginia, who was on the low
end of poll estimates.

Petak noted that new pipeline projects like Rockies Express
were already allowing more gas to be shipped to market.

If the summer turns out to be an easy one, analysts say
there will be plenty of supply around to rebuild storage.

The Reuters poll showed analysts expected Henry Hub prices
in 2009 to slip nearly 2 percent to $8.54, then hold relatively
steady in 2010 at about $8.53.
COMPANY 2008 EST PREVIOUS 2009 2010
Barclays Capital 9.40 7.75 8.75 8.50
BMO Capital Markets 8.50 7.00 9.50 9.50
CH Guernsey 8.86 7.24 8.15
Deutsche Bank 9.25 7.75 10.75 10.75
ESAI 7.75 7.25 7.17 7.04
EVA 8.08 6 63 7.04 6.96
FC Stone 8.60 7.50 8.20 7.70
FirstEnergy 9.00 7.25 9.00 9.50
Gelber Corp 8.73 6.20 9.22
Global Insight 9.04 7.60 8.86 8.76
Goldman Sachs 9.25 NA NA
ICF International 7.72 8.00 7.67 8.00
Raymond James 8.01 7.00 7.00 8.00
Jofree Consulting 8.03 7.20 8.45 9.00
JPMorgan 8 78 7.50 8.78
Natixis Bleichroeder 8.40 7.30 8.50
RBC Capital Mkts 8.00 7.50 7.50 7.50
S&P 8.92 7.71 8.86 8.76
Stephen Smith Energy 9.45 7.25 9.00 8.70
Strategic Energy 9.50 7.50 8.60 8.30
Tristone Capital 9.00 7.50 9.50 10.00
Tudor Pickering Holt 8.85 7.00 8.75 8.00
UBS 8.35 7.40 8.60 8.60
US EIA 8.59 7.78 8.32
Wachovia 9.14 7.49 8.72
AVERAGE 8.69 7.34 8.54 8.53
(Reporting by Joe Silha; Editing by Marguerita Choy)