Natural Gas May Drop as U.S. Weather Moderates, Survey Shows

Natural gas futures may drop next week as moderating weather reduces demand for the heating and power-plant fuel, a Bloomberg survey showed.

Eleven of 15 analysts, or 73 percent, forecast that futures will decline on the New York Mercantile Exchange through May 3 26. Three, or 20 percent, said gas will advance and one predicted prices will stay the same. Last week, 64 percent of participants said gas would fall.

Temperatures will be seasonal across most of the East Coast and the Midwest next week with a streak of below-normal readings in Texas and other central states, according to MDA Weather Services in Gaithersburg, Maryland. Gas this week is heading for its first decline in 10 weeks on milder weather, after an unusually cold start to spring buoyed fuel demand.

“Traders are seeing the writing on the wall and can see spring weather on the horizon,” Aaron Calder, senior market analyst at Gelber & Associates in Houston, said in a note to clients yesterday.

Natural gas futures for May delivery fell 24.1 cents, or 5.5 percent, to $4.167 per million Btu during the first four days of this week in New York. Prices have climbed 24 percent this year.

The low in New York City on April 30 will be 52 degrees Fahrenheit (11 Celsius), 3 above normal, after dropping to 6 lower than average on April 23 at 41 degrees, according to AccuWeather Inc. in State College, Pennsylvania. The low in Chicago on April 30 will be 10 above normal at 57 degrees.

Supply Report

Gas stockpiles rose 30 billion cubic feet to 1.734 trillion cubic feet in the week ended April 19, below the five-year average gain of 50 billion, the Energy Information Administration reported yesterday. Analyst estimates compiled by Bloomberg showed an expected increase of 33 billion.

A supply deficit versus the historic norm widened to 5.1 percent from 4.2 percent in the seven days ended April 12, the most February 2011, EIA data show.

The gas survey has correctly forecast the direction of prices 50 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

3 11 1

To contact the reporter on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net;

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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