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Natural-Gas Futures Seen Falling Next Week as Cooler Weather Cuts Fuel Use
Natural gas futures may fall next week as the final days of summer signal slower demand for gas- fired electricity to run air conditioners, a Bloomberg News survey showed.
Seven of 18 analysts, or 39 percent, forecast gas futures will decline on the New York Mercantile Exchange through Sept. 17. Five, or 28 percent, predicted prices will rise and six said there would be little change. Last week, 41 percent of participants said gas would fall.
Prices have dropped 23 percent since the end of July as a surplus indicated supplies were sufficient to meet demand from power plants. About 23 percent of U.S. electricity is generated using natural gas, according to the Energy Department.
“As heat leaves the forecast, there will be little to keep prices from falling further,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “I expect another 10 percent down on the spot contract technically before a seasonal low forms.”
Natural gas for October delivery fell 17.1 cents, or 4.3 percent, to $3.768 per million British thermal units this week through yesterday. Gas has declined 32 percent this year.
Midwest and Northeast temperatures will be in a normal range through Sept. 18, according to Commodity Weather Group in Bethesda, Maryland.
New York will have a high of 72 degrees Fahrenheit (22 Celsius) today, 5 degrees below normal, according to AccuWeather.com in State College, Pennsylvania. The city reached a high of 96 degrees on Sept. 1, 17 degrees above normal.
Supply Report
Gas stockpiles gained 58 billion cubic feet to 3.164 trillion in the week ended Sept. 3, the Energy Department said yesterday. Supplies were 5.5 percent higher than the five-year average.
The department cut its gas price forecast in the monthly Short-Term Energy Outlook report on Sept. 8. Henry Hub spot prices will average $4.54 per million Btu this year, down 3.2 percent from last month’s estimate of $4.69, the department said.
Spot prices at Henry Hub in Erath, Louisiana, fell 2.08 cents, or 0.6 percent, to $3.7914 per million Btu yesterday on the Intercontinental Exchange.
The gas survey has correctly forecast the direction of prices 48 percent of the time since its June 2004 introduction.
Bloomberg’s survey of natural-gas analysts and traders asks
for an assessment of whether Nymex natural-gas futures will
probably rise, fall or remain neutral in the coming week. This
week’s results were:
RISE FALL NEUTRAL
5 7 6
To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net;
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