Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Bank of America Raises Natural Gas Forecast on Glut Elimination

April 25 (Bloomberg) -- Bank of America Corp. raised its forecast for U.S. natural gas prices in 2013 after the biggest drawdown from storage in a decade left inventories below the five-year average.

Natural gas will trade at an average $3.90 per million British thermal units, Sabine Schels, an analyst at the bank in London, said in an e-mailed report dated yesterday, raising her prediction from $3.75. Prices will drop to $3.50 this summer, she said. The bank maintained its 2014 forecast at $4.20. Month-ahead gas rose 25 percent this year to trade at $4.19 per million Btu at 6:28 a.m. on the New York Mercantile Exchange.

The use of gas in power generation in place of coal is still needed to support prices as inventories are at the fourth-highest level on record for the time of year, Schels said.

“A key risk stems from reversing coal-to-gas switching in power generation too sharply as some coal substitution is still required to balance the market,” she said. “Coal substitution remains an important price driver this summer.”

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.