Natural gas futures may decline next week on forecasts for milder U.S. weather in June, a Bloomberg survey showed.
Five of 12 analysts, or 42 percent, predicted that futures will fall on the New York Mercantile Exchange through June 7. Four, or 33 percent, said gas will stay the same and three said prices will advance. Last week, 45 percent of participants said gas would decline.
The eastern two-thirds of the U.S. will see below-normal temperatures from June 4 through June 8 following Northeast heat this week, according to MDA Weather Services in Gaithersburg, Maryland. Gas prices yesterday fell 3.9 percent, the biggest one-day drop in four weeks, after a government report showed a stockpile gain that exceeded forecasts.
“If you compare the June forecast, it’s looking cooler at this point, particularly than where we were last year,” said Alan Lammey, an energy analyst with WeatherBell Analytics LLC in Houston. “It keeps demand at bay and that means more natural gas is going to go into storage on a weekly basis.”
Natural gas futures fell 25.3 cents, or 6 percent, to $3.984 per million British thermal units this week on the New York Mercantile Exchange, the first decline in three weeks. Prices declined 8.3 percent this month, halting a two month streak of gains with the biggest drop since August.
The high temperature in New York City on June 7 will be 66 degrees Fahrenheit (19 Celsius), 11 below normal, after reaching 90 yesterday, according to AccuWeather Inc. in State College, Pennsylvania.
Power plants will account for 32 percent of U.S. gas consumption this year, Energy Information Administration data show.
U.S. inventories expanded by 88 billion cubic feet to 2.141 trillion in the week ended May 24, below than the five-year average gain of 92 billion for the period, the EIA said. Analyst estimates compiled by Bloomberg predicted an increase of 86 billion.
A supply deficit versus the historic norm held steady at 3.9 percent, according to the EIA, the Energy Department’s statistical arm. A deficit versus year-earlier levels narrowed for a seventh week, dropping to 23.7 percent from 24.9 percent.
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 gas futures will probably rise, fall or remain neutral in the coming week. This week’s results were:
RISE FALL NEUTRAL
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