Mr. Bodell previously spent 25 years at Unocal Corp. providing fundamental research, supporting trading activities and eventually assuming the role as Director of Strategic Planning and Market Analysis. Mr. Bodell retired from Unocal in 2004 and subsequently became a Director at Cambridge Energy Research Associates, Inc. (CERA) based in Houston, Texas. Presently Mr. Bodell is assisting in the development of a new line of energy research from Strategic Energy Research and Capital. The natural gas market has evolved quickly and dramatically in early 2008 on the back of large storage draws stemming from La Niña-linked colder-than-normal winter weather, particularly as it impacted gas consumption in the Consuming East. Further WTI crude spot and futures prices have strengthened providing additional support to spot gas prices. As a result, we are raising our advice on the 2008 average Henry Hub spot gas price to $9.10 per mmBtu. In early January, we believed that the average 2008 spot price would be $7.30. This article will discuss the fundamentals behind this significant market change and offer a projection of weekly spot prices for the remainder of 2008. The 135 billion cubic feet (bcf) gas storage withdrawal for the week ending on February 29 as reported by EIA (March 6) is greater than average for the sixth week in 2008. For the week, the comparative storage deficit moved from -22 to -45 bcf (Exhibit 1). Accordingly, the spot gas price adjusted upward to a low-$9.00 range, which is above the trajectory established in mid-2007. Since mid-January, comparative inventories have declined from a 73 bcf surplus to the current deficit, a 118 bcf net decline. A deficit in comparative inventories last occurred in 2005. The market is now establishing the price premium for physical supply in this new deficit storage position. For a copy of the report please contact your Strategic Energy Research and Capital representative.