Australia's natural gas sector wants to know why it is not playing a greater role in the push to reduce greenhouse gas emissions.

The Federal Government is funding two research projects in Queensland to extract methane from coal, with any carbon dioxide emissions to be buried underground.

But the Australian Pipeline Industry Association has questioned the continued reliance on coal while renewable energy sources come on line.

Chief executive Cheryl Cartwright says there is enough known natural gas reserves in Australia to last 100 years and it would make better environmental sense to start using it.

"Instead of relying on coal fired generation in the immediate term and the medium term, we can start to reduce greenhouse gas emissions," she said.

"Certainly not to the level that renewable energy provides, which is almost zero but natural gas greenhouse emissions in energy generation are far lower than coal."

Federal Resources Minister Ian Macfarlane says coal will remain a feature of global energy generation for the next century.

Mr Macfarlane says Australia is leading the research into cleaner burning and emission technologies, and the natural gas sector should see itself as a part of that.

"They're promoting their side of the industry, the Government is promoting a broad mix, we need to make sure as we announce that mix we get it right," he said.

"Gas has its place but it has to be part of the mix."

The Interior Department has dropped claims that the Chevron Corp. systematically underpaid the government for natural gas produced in the Gulf of Mexico, a decision that could allow energy companies to avoid paying hundreds of millions of dollars in royalties.

The agency had ordered Chevron to pay $6 million in additional royalties but could have sought tens of millions more had it prevailed. The decision also sets a precedent that could make it easier for oil and gas companies to lower the value of what they pump each year from federal property and thus their payments to the government.

Interior officials said Friday that they had no choice but to drop their order to Chevron because a department appeals board had ruled against auditors in a separate case.

But state governments and private landowners have challenged the company over essentially the same practices and reached settlements in which the company has paid $70 million in additional royalties.

In a written statement, the department's Minerals Management Service said it would have been useless to fight Chevron.

"It is not in the public interest to spend federal dollars pursuing claims that have little or no chance of success," the agency said. "MMS lost a contested and controversial issue" before the appeals board. "Had we simply wanted to capitulate to 'big oil,' the agency would not have issued the order in the first place."

Trying to pay correctly

Chevron said in a written statement that it "endeavors to calculate and pay its oil and gas royalties correctly," and the Interior Department had agreed.

The agency notified Chevron of its decision in a confidential letter on Aug. 3, which the New York Times obtained under the Freedom of Information Act.

The reversal in the case, which involves Chevron's accounting of natural gas sales to a company it partly owned, has renewed criticism that the Bush administration is reluctant to confront oil and gas companies and is lax in collecting royalties.

In return for the right to drill on federal lands and in federal waters, energy companies are required to pay the government a share of their proceeds. Last year, businesses producing natural gas paid more than $5.1 billion in government royalties.

But the Bush administration has come under fire on Capitol Hill for its record on collecting payments. While the Interior Department has sweetened incentives for exploration and pushed to open wilderness areas for drilling, it has also cut back on full-scale audits of companies intended to make sure they are paying their full share.

Administration officials knew that dozens of companies had incorrectly claimed exemptions from royalties since 2003, but they waited until December 2005 to send letters demanding $500 million in repayments.

In February, the Interior Department acknowledged that oil companies could escape more than $7 billion in payments because of mistakes in leases signed in the 1990s. Top officials are trying to renegotiate those deals, but some Republicans and Democrats have complained that the administration is dragging its feet.

Dynegy involved

In the Chevron case, auditors in the Minerals Management Service were addressing an issue that had bedeviled royalty enforcement for decades: How does the government make sure it gets its due when companies sell natural gas to businesses they partly own?

In 1996, Chevron sold its holdings in more than 50 processing plants to Dynegy in exchange for a 26 percent stake in the natural gas company, which is based in Houston. For the next seven years, Chevron sold virtually all its domestic natural gas to Dynegy for processing.

In their original accusations, dating to 2001, the auditors asserted Chevron had understated sales, and hence its royalty obligations, by inflating costs for processing gas at Dynegy.

Duke Energy Corp. (DUK NYSE) on Monday said the natural gas business that it is in the process of spinning off will be named Spectra Energy Corp.

Duke said in June that it would spin off the business to its shareholders as a separate, publicly traded company, but did not name the new company. Spectra will include Duke's natural-gas transmission unit, which owns about 17,500 miles of pipeline, as well as its 50 percent stake in Duke Energy Field Services.

Bolivia's nationalization of energy assets over the weekend excluded any agreement with Brazil on natural gas prices and compensation for Petroleo Brasileiro SA's oil refineries that will become the property of the government.

Brazil's Mines and Energy Minister Silas Rondeau said his government will keep discussing the issue of pricing with Bolivia and come up with a proposal to compensate for the takeover of Petrobras' two refineries. Rio de Janeiro-based Petrobras is Bolivia's biggest foreign investor and provided almost a quarter of Bolivia's tax revenue last year.

``It's going to be difficult for the Brazilians to accept a unilateral change in prices,'' said Dino Barajas, a Los Angeles- based lawyer for Paul Hastings LLP who was voted the best energy lawyer in 2004 by California Lawyer Magazine. ``They are right in seeking some sort of compensation'' for Petrobras's refineries.

Bolivian President Evo Morales claimed victory after he negotiated new contracts with all 10 energy companies that have interests in Bolivia, including Petrobras, Spain's Repsol-YPF and France's Total SA. The extent of his victory, aimed at reducing poverty in the continent's poorest nation, will depend on his ability to sell natural gas to Brazil at a higher price.

Brazil's $790 billion economy is the largest in South America and four times bigger than Argentina's, which is the second- biggest. Bolivia supplies over half of Brazil's gas needs, and about four-fifths of all gas consumed by Sao Paulo's industrial belt.

Stripy Jumper

``We are obliged to be married to Brazil without divorce,'' Morales said in a ceremony in La Paz in the early hours of yesterday, wearing the same stripy sweater he wore when he met Spain's King Juan Carlos and China's President Hu Jintao after becoming president last year. ``Brazil is the leader in the region.''

Morales said the agreements signed with the 10 energy companies would bring in more than $4 billion a year in revenue from 2010, transforming a nation where over a third of the population lives in extreme poverty, according to the International Monetary Fund.

Bolivian government officials will meet with their Brazilian counterparts in Rio de Janeiro on Nov. 10 to discuss an increase in natural gas prices, according to Brazil's Rondeau.

International Prices

``It's very clear that the price of gas today in Sao Paulo adheres absolutely to the price in the international market,'' Rondeau said. ``If we don't reach an agreement, the issue will go to international arbitrage.''

Brazil is developing its own Plangas deposit, which will produce as much as 26 million cubic meters of natural gas a year, and building two liquefaction plants in Rio de Janeiro and Fortaleza to bring in supplies from other countries, Rondeau said.

At the same time, Morales is planning to lessen his country's dependence on Brazil by supplying natural gas to Argentina and Chile.

Bolivia will almost quadruple gas exports to Argentina over the next 20 years, after Morales signed a deal with Argentine President Nestor Kirchner on Oct. 18. Bolivia is also in talks with Chile's government to become a supplier to that country's copper district, which flanks its western border.

Total

Paris-based Total, the world's fourth-biggest energy company, will spend about $2 billion producing and exploring for gas in Bolivia, Morales said on Oct. 28. Total spokeswoman Patricia Marie declined to confirm the figures.

State-owned oil company YPF Bolivianos will become a majority owner in each of the ventures agreed to by the 10 companies that signed a deal with Bolivia over the weekend, according to ABI.

Los Angeles-based Occidental Petroleum Corp. will spend $220 million on exploring or gas in the Naranjillo and Chaco Sur, the government said.

Petrobras and Madrid-based Repsol didn't say how much they would invest in Bolivia. Repsol has invested $1.17 billion in the country over the past decade.

Since 1994 Petrobras has invested $1.5 billion in Bolivia on oil and gas exploration and production, construction and expansion of pipelines and to renovate the country's two refineries, which Petrobras operates. The refineries produce all of Bolivia's gasoline and aviation fuel and 70 percent of its diesel oil.

Morales, who campaigned for coca-leaf farmers' rights before becoming Bolivia's first indigenous leader last year, sent soldiers to take over the country's natural gas industry on May 1 and threatened to evict foreign companies if they didn't agree to hand over their assets to YPF Bolivianos within 180 days.

Despite a reduction in activity due to weak natural gas prices, the oilpatch is on pace to drill a record number of wells this year, says the Canadian Association of Oilwell Drilling Contractors.

In releasing its outlook for the remainder of the year and 2007, CAODC said the number of rigs drilling declined last month in response to weak gas prices.

During the fourth quarter an average of 454 rigs are expected to be running and over the course of 2006, the average number of rigs drilling is pegged at 498, representing a utilization rate of 62%.

In terms of overall activity, the association expects 22,298 well completions this year, which is more than 3,700 lower than CAODC's original estimate released last October, but still ahead of the record 21,927 completions in 2005.

Drilling is projected to decline further next year, resulting in an average of 427 rigs running, a 51% utilization rate and 19,023 well completions, a drop of 15% from 2006.

"The 2007 forecast of drilling activity is dominated by weaker gas prices," said the association's outlook.

"The CAODC expects oil well drilling and deeper gas work to continue. Drilling to establish gas reserves is not impacted by reduced gas prices, which are assumed to be a relatively short-term phenomenon."

The forecast is based on oil being US$65 per barrel and natural gas prices of US$6.50 per thousand cubic feet.

China's largest offshore oil company said that it has signed framework agreements with three foreign energy suppliers on buying liquefied natural gas (LNG).

China National Offshore Oil Corp (CNOOC) said on its website that it has signed master agreements with French Suez and Total companies and Shell Eastern Trading Ltd. for spot trading.

The spot trading agreements are different from long-term fuel supply contracts.

The buyers and sellers sign a master contract first and then will elaborate on trading details when a particular transaction is made.

As one of China's three major oil companies, the Beijing-based CNOOC is the country's pioneer in exploring LNG market.

China's first shipment of 60,000-ton imported LNG arrived from Australia at the LNG terminal in south China's Guangdong Province on May 26.

China's three oil giants, China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec) and CNOOC, all have LNG development plan, under which they will import at least 60 million tons by 2020.

The U.S. Department of Energy says it will conduct a public education forum on liquefied natural gas next month to help increase U.S. energy security.

"The Department of Energy's Liquefied Natural Gas Forums will initiate constructive dialogue among community members, local, state, and federal government leaders," said Jeffrey Jarrett, assistant secretary for fossil energy. "This forum is one step, of many, that will help us address and evaluates our energy needs, and increase America's energy security."

The Energy Information Administration estimates the United States will have to increase imports of LNG by more than 600 percent during the next 25 years to fulfill increasing demand for natural gas.

The Houston forum, the fourth in a series, will be open to the public. Questions and comments can be submitted via the internet, on cards to be provided at the event, or in written form by mail to: LNG Forums, Attn: Bob Corbin, 955 L'Enfant Plaza North, S.W., Suite 1500, Washington, D.C. 20024

The first three forums were held in Boston, Los Angeles and Astoria, Ore

Precision Drilling Trust reported its net profits fell to $139.7-million in the third quarter from nearly $1.4-billion last year, a period when the company booked a huge gain from the sale of assets.

Canada's largest oil and natural gas driller said Thursday it earned $1.11 a share for the quarter ended Sept. 30, compared with net profits of $11 a share in the same 2005 period.

The 2005 results, which came before Precision Drilling became a trust, were fattened by $1.38-billion in special gains from the sale of assets, mainly the company's international division.

In its latest quarter, revenues rose to $349.6-million from $300-million, but the company warned that its drilling business is being squeezed by lower natural gas prices, which has cut the number of gas wells being drilled in western Canada.

Meanwhile, the company said it generated record operating profits of $142.4-million for the third quarter, up from $111.9-million because of higher prices for contract drilling and well completion and production services.

“We can only do as well as our customers and we are working closely with them to ensure we respond to their needs in this market,” said Gene Stahl, president and chief operating officer of the trust.

“We are concentrating on the basics — customer focus, cost control and allocation of capital, and most importantly the welfare of our people.”

To close out the third quarter, the company noted that 1,784 new well licences were issued in September, the lowest industry total for that month since 2002.

In breaking down its operations, Precision said its drilling rig activity in October is averaging 48 per cent operating day utilization compared with 68 per cent in the 2005 fourth quarter.

While wet weather in October has contributed to the decline, the trust said the weakness in natural gas prices “has impacted the urgency with which customers are approaching their upcoming winter drilling programs.”

“In contrast to last year, there is more rig availability for the spot market and bidding for contracts has become more competitive,” the trust said.

“Natural gas accounts for about 70 per cent of Precision's activity in Canada and the drop in prices has slowed down drilling but the one-year forward strip on gas prices remains respectable,” added Mr. Stahl.

“What we are seeing is movement away from drilling shallow gas wells to deeper targets and a shift in our equipment utilization to our deeper rigs. It's a good example of how Precision can respond to the changing market.”

Crude oil prices rose Thursday a day after jumping more than US$2 a barrel in response to a report that showed U.S. inventories dropped last week. OPEC's steps to cut production and attacks by Nigerian villagers on oil facilities also contributed to the increase.

Light, sweet crude for December delivery was up 25 cents to US$61.65 a barrel in Asian electronic trading on the New York Mercantile Exchange.

Though global oil supplies are still relatively ample and some skepticism remains about OPEC's willingness to go through with the 1.2 million barrel-a-day reduction it announced late last week, traders were betting on tightening supplies going into the winter, when fuel demand ramps up.

Heating oil futures rose nearly half a cent to $1.7435 a gallon (3.8 liters) on the Nymex, while gasoline futures dropped marginally to $1.5920 a gallon (3.8 liters).

Crude oil stockpiles fell by 3.3 million barrels to 332.3 million barrels in the week ending Oct. 20, the U.S. Energy Department's Energy Information Administration said Wednesday. Distillate stocks, which include heating oil and diesel fuel, fell by 1.4 million barrels to 144 million barrels, and gasoline supplies dropped by 2.8 million barrels to 207.4 million barrels.

Crude stocks declined last week largely because of a 936,000-barrel decrease in imports from the previous week.

Oil prices had fallen to an 11-month low below US$57 a barrel Friday — even after the 11-member Organization of Petroleum Exporting Countries decided to reduce its daily production by a larger-than-anticipated amount of 1.2 million barrels — amid doubts about the cartel's ability to implement the decision to cut daily production.

But prices have bounced back up above US$60 a barrel after reports this week that so far, Saudi Arabia, the United Arab Emirates and Iran have begun informing customers that they are going through with the cuts, according to Dow Jones Newswires.

Meanwhile in Nigeria Wednesday, angry villagers stormed and seized three Royal Dutch Shell PLC oil platforms in the Niger Delta, forcing oil production to be shut down at each one, a spokesman for the oil company said.

Royal Dutch Shell officials declined to say how much oil had been cut off after the platforms were attacked. Attacks by armed militants in Nigeria have cut more than a quarter of the country's oil exports since the beginning of this year.

In other trading, natural gas futures rose 8.8 cents to $7.781 per thousand cubic feet. The contract has risen about US$2 in two weeks.

The federal government has agreed to halt oil and natural gas lease sales off the Louisiana coast until environmental studies determine whether drilling degrades the coastline, the Department of the Interior announced Tuesday.

Gov. Kathleen Blanco sued the agency in July, trying to block it from selling leases to 381 tracts in the western Gulf of Mexico for future oil and gas exploration. The sale went ahead, with 62 companies submitting $340 million in high bids.

The agency said Tuesday it settled the lawsuit by requiring that companies planning to drill in those areas prepare a new environmental assessment, subject to review by Louisiana coastal officials.

The department also agreed to postpone a lease sale planned for March until it completes a new environmental impact study, taking into account the 217 square miles of Louisiana's coast that were washed away in Hurricanes Katrina and Rita last year.

Interior Secretary Dirk Kempthorne called Blanco to acknowledge the settlement on Tuesday, Blanco said.

Blanco called the settlement a breakthrough that will give Louisiana new power over its own coast. She said the settlement will lead to an influx of federal money because the environmental assessments are expected to show that drilling contributes to the steady erosion of Louisiana's marshy coast.

“I fully expect that an honest environmental assessment will lead to money” from the federal government, she said at a news conference.

EnCana Corp., Canada's largest natural-gas producer, said third-quarter profit soared fivefold on higher output of the fuel and gains from an asset sale and derivatives contracts.

Net income rose to $1.36 billion, or $1.65 a share, from $266 million, or 30 cents, a year earlier, the Calgary-based company said in a statement today. Sales after royalty payments rose 31 percent to $3.92 billion.

EnCana lowered its 2006 gas-production forecast to 3.36 billion to 3.4 billion cubic feet a day from an earlier 3.42 billion to 3.56 billion. The reduction reflects reduced drilling because of higher costs and lower gas prices, said Jim Hall, a portfolio manager at Mawer Investment Management in Calgary.

``There were no big surprises, one way or the other, in quarter,'' said Hall, who oversees the equivalent of about $665 million including 500,000 EnCana shares. ``Gas prices are weaker and costs are up, so why would you go out and drill like crazy when there is no need to at this time?''

Chief Executive Officer Randy Eresman, 48, has sold assets to focus on natural-gas fields in North America and oil-sands projects in northern Alberta. EnCana and Houston-based ConocoPhillips on Oct. 5 agreed to spend $10.7 billion to produce and refine oil from oil sands.

Shares of EnCana fell 40 cents to $C53.35 at 9:39 a.m. on the Toronto Stock Exchange. The stock, which has 14 buy recommendations from analysts, 11 holds and three sells, has gained 1.5 percent this year.

Less Drilling

The results included gains of $255 million from the sale of a stake in a Brazilian offshore oil discovery and $285 million from the increased value of derivatives contacts used to lock in prices for gas and oil, EnCana said. In the second quarter of 2005, the hedging practice reduced earnings by $604 million.

Excluding such one-time items, EnCana earned 98 cents a share, exceeding the estimate of 95 cents from Andrew Potter, an analyst at UBS Securities LLC in Calgary. Higher-than-forecast gas prices and lower spending contributed to better-than-expected performance, Potter said in a note today.

EnCana said it expects to drill about 3,650 wells this year, down 15 percent from 2005. Gas futures traded in New York were 36 percent lower than a year earlier in the third quarter, averaging $6.182 per million British thermal units, down from a record $15.78 in December.

Third-quarter gas production rose 4.3 percent to an average of 3.36 billion cubic feet a day, and the fuel sold for an average of $5.75 per thousand cubic feet, down 21 percent from a year earlier.

Daily output of oil and natural-gas liquids was little changed at 150,565 barrels, compared with 150,457 a year earlier, and the liquids sold for $50.37 a barrel, a gain of 9.1 percent.

Crude oil was little changed in New York after rising yesterday as frigid weather in the U.S. focused investors on peak winter heating demand.

Freezing winds sweeping across the northern U.S. may bring snow to parts of Colorado and Wyoming, forecaster AccuWeather Inc. said on its Web site. Below-normal temperatures through Oct. 31 in the Northeast, the nation's largest heating oil consumer, will lift heating demand 30 percent above levels usual for this time of year, researcher Weather Derivatives said.

``I think oil is going to hold from here,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``You don't usually get snow until the beginning of November.''

Crude oil for December delivery was at $59.55 a barrel, up 20 cents, in after-hours electronic trading on the New York Mercantile Exchange at 8:29 a.m. in Sydney.

The contract rose 54 cents, or 0.9 percent, to $59.35 a barrel yesterday, its first gain in three days. Heating oil for November delivery was at $1.6988 a gallon after rising 1.6 percent yesterday.

``It's pretty cold out there right now,'' Phil Flynn, vice president of risk management at Alaron Trading Corp. in Chicago, said yesterday. ``We're getting into the winter season and consumption is going to go up.''

World oil demand peaks in the fourth quarter when refiners in the U.S., Europe and northern Asia prepare heating fuel for the winter.

Winter Rebound

The early cold snap coupled with the contract's failure to breach long-term support around $58.60 a barrel, may be enough to stall the recent slide in prices, Excel's Waggoner said.

``December is a fairly active month,'' he said. ``A lot of people were expecting the market to break down. But we hit that support and it's gone straight back up.''

Oil prices have fallen 24 percent from the record $78.40 reached on July 14. Futures slid the past two months as fuel stockpiles in the U.S., the world's biggest oil consumer, rose and forecasters including the Organization of Petroleum Exporting Countries trimmed their demand projections citing slower global economic growth.

U.S. oil stockpiles held 335.5 million barrels on Oct. 13, or 14 percent more than the five-year average for the period. Supplies of distillates, including heating oil and diesel, were 145.4 million barrels, 15 percent more than average.

An Energy Department report later today will probably show crude oil supplies gained 2.9 million barrels last week, based on the median estimate from a Bloomberg News survey of 10 analysts. Distillate supplies may have dropped by 1.25 million barrels while refiners had units shut for pre-winter maintenance, according to the survey.

``We have ample stocks,'' Andrew Lebow, a broker with Man Financial in New York, said yesterday ``We're well above last year and well above the average. We've got a way to go here to draw back to normal'' levels.

- Oil rose for a second day on Wednesday, pushing toward $60 a barrel after the United Arab Emirates' move to cut exports lent more credibility to OPEC's supply curbs while cold U.S. weather increased energy demand.

U.S. light crude rose 22 cents to $59.57 a barrel by 0243 GMT, after gaining 54 cents on Tuesday. London Brent was up 24 cents at $60.10 a barrel.

Abu Dhabi's state oil firm told major customers on Tuesday that it would cut crude exports by about 5 percent in November, following Saudi Arabia's lead and tempering skepticism on how OPEC's 1.2 million barrel per day (bpd) cut would materialize.

But prices are still only about 5 percent above the year's low of $56.55 a barrel, touched last week, and have not closed above $60 a barrel since Oct 5 as some traders still want to see proof of deeper cuts reflected in inventory levels.

"It shows some resolve on the part of OPEC producers, but it is going to take more than these two countries to restore the group's credibility," said Jim Ritterbusch, president at Ritterbusch and Associates in Galena, Illinois.

The UAE is due to reduce output by about 100,000 bpd as part of an OPEC deal last week to cut production by about 4.3 percent of its September output. Top oil exporter Saudi Arabia told customers at the weekend it was cutting November supply.

However, U.S. government inventory data due out later on Wednesday is likely to show a further rise in already high crude inventories as refinery turnarounds kept feedstock demand tepid, a Reuters poll of analysts showed .

Crude stocks probably rose by 2.6 million barrels. With a more than one-month sailing time from the Middle East to U.S. shores, it may be December before OPEC curbs begin to show.

Distillate stocks, including heating oil, which stood 15 percent above year-ago levels in the previous week, were seen falling by 1.1 million barrels, the survey found. Gasoline stocks likely dipped by 600,000 barrels.

"We've got surplus supplies of winter fuels, which despite concerns over a colder than expected winter, should keep up with demand through winter," Ritterbusch said.

Temperatures in the U.S. Northeast, the biggest oil consuming region in the world, will be colder than usual and see higher heating demand over the next five days, U.S. based private forecaster Meteorlogix said on Tuesday.

Private WSI Corp on Monday predicted warmer-than-normal Northeast temperatures in November followed by cooler weather in December and January, becoming the latest forecaster to predict average or below-average temperatures for the region.

The price of crude oil rose 54 cents Tuesday on the New York Mercantile Exchange to close at $59.35 per barrel.

Natural gas soared about 21 cents to end the session at $7.091 per million Btu, a 3-percent gain, MarketWatch said.

Heating oil rose 2.62 cents to settle at $1.6952 per gallon and gasoline increased 6.45 cents, or 4.4 percent, to end the day at $1.536 per gallon.

AAA said early Tuesday that the average U.S. retail gasoline price was $2.202 per gallon.

The price of natural gas may fall in New York this week as speculation grows that record-high inventories will be adequate to meet peak demand this winter.

Six of 11 traders and analysts, or 55 percent, predicted that prices would drop this week, according to an Oct. 20 survey by Bloomberg News. Four said prices would gain, and one expected little change.

The reasoning behind the belief in a drop in prices was rooted in a 28 percent rise last week, one that traders said was not justified because utilities and storage companies were flush with inventory.

Colder-than-normal weather in the central United States in the past two weeks was not severe enough to cause a surge in demand, respondents said.

"Cold temperatures may support prices for a while, but high storage levels will be pressuring the market for months to come," said Tim Evans, an energy analyst at Citigroup Global Markets in New York.

Natural gas for November delivery ended last week at $7.241 per million British thermal units on the New York Mercantile Exchange, the highest close since Aug. 11.

Natural gas stockpiles reached 3.442 trillion cubic feet, or 97.466 billion cubic meters, in the that week ended Oct. 13, a record level based on 12 years of data from the U.S. Energy Department. The previous record was 3.327 trillion, reached in the week that ended Nov. 5, 2004.

Ronald Barone, an analyst at UBS Securities in New York, said that stockpiles would likely climb to 3.5 trillion cubic feet before cold weather forced utilities to drain natural gas to meet rising demand for heat. Inventories usually are expanded from April to November to help supplement pipeline shipments in winter.

Excess natural gas in pipelines has forced some producers to halt output. Woodside Petroleum, one of the largest oil and natural gas companies in Australia, said on Oct. 19 that it might miss 2006 production targets in part because it had idled some U.S. fields in reaction to low prices.

Cold weather in the past two weeks across the central United States forced households to turn on furnaces early.