Natural Gas Rises in Survey as Cold Weather Boosts Heating Use

Natural gas futures may climb next week as below-normal temperatures increase demand for the heating fuel, a Bloomberg News survey showed.

Five of 10 analysts, or 50 percent, said gas futures will rise on the New York Mercantile Exchange through Dec. 20. Four predicted gas will fall and one said prices will stay the same. Last week, 89 percent of participants said prices would advance.

MDA Weather Services said temperatures may be lower than average in the northern tier of the U.S. from Dec. 17 through Dec. 21. Energy Information Administration data yesterday showed that gas inventories slid 81 billion cubic feet in the week ended Dec. 6 to 3.533 trillion, surpassing the five-year average drop for the week of 76 billion.

“The larger-than-normal draws over the past several weeks have been a function of the cold start to winter,” said Mike Tran, an analyst at CIBC World Markets in New York. “The cold front is expected to persist through the remainder of the month.”

Natural gas for January delivery surged 29.5 cents, or 7.2 percent, to $4.409 per million British thermal units in the first four days of trading this week on the New York exchange. It was the highest settlement price since July 20, 2011. The futures are heading for a sixth consecutive weekly gain, the longest stretch since the period ended April 19.

The low in Minneapolis on Dec. 21 may be minus 3 degrees Fahrenheit (minus 19 Celsius), 14 less than usual, according to AccuWeather Inc. in State College, Pennsylvania. Temperatures in Chicago may fall to 10 degrees, 11 below average. About 49 percent of U.S. households use gas for heating, according to the EIA, the Energy Department’s statistical arm.

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

5 4 1

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net

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

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