Natural Gas May Rise as Output Growth Wanes, Survey Shows
Natural gas futures may climb on speculation that production growth will decline, a Bloomberg News survey showed.
Five of 12 analysts, or 42 percent, forecast that gas futures will advance on the New York Mercantile Exchange through May 20. Four, or 33 percent, said futures will fall and three predicted that prices will stay the same. Last week, 59 percent of participants said gas prices would decline.
The Energy Department lowered its forecast for natural gas output in 2011 by 0.1 percent and raised its outlook for prices in its Short-Term Energy Outlook on May 10. Marketed gas production will average 63.23 billion cubic feet a day in 2011, down from 63.32 billion estimated in April, the department said, citing a drop in drilling and a forecast of higher consumption.
“Producers obviously are not happy with the price of natural gas at $4,” said Jay Levine, the president of Enerjay LLC, a Portland, Maine-based energy brokerage. “It’s not conducive for them to produce natural gas at these cheap prices.”
Natural gas for June delivery climbed 1.1 cents, or 0.3 percent, to $4.246 per million British thermal units this week on the New York exchange.
Injections into gas storage have been smaller-than-average since the week ended April 22, according to the Energy Department.
Gas inventories rose 70 billion cubic feet in the week ended May 6 to 1.827 trillion cubic feet, the department said yesterday. The five-year average increase for the week is 90 billion cubic feet.
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 4 3
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