Natural Gas Drops in Survey on Moderate Eastern U.S. Weather
Natural gas futures may decline next week as moderating weather limits demand for the power-plant fuel, a Bloomberg survey showed.
Five of 12 analysts, or 42 percent, predicted that futures will fall on the New York Mercantile Exchange through July 12. Four, or 33 percent, said gas will stay the same and three predicted prices will increase. Last week, 53 percent of participants said gas would decline.
The region east of the Mississippi River, including Chicago, New York and Washington, may have near-normal temperatures from July 13 to July 17, according to Matt Rogers, president of Commodity Weather Group LLC. Increases in gas stockpiles have topped five-year averages for five consecutive weeks, Energy Information Administration data show.
“The weather is warming up but it’s not hot enough to develop a significant amount of demand for this time of the year and the injections are going to continue to be bearish,” said Kent Bayazitoglu, an analyst at Gelber & Associates in Houston.
Natural gas futures gained 12.5 cents, or 3.5 percent, to $3.69 per million British thermal units during the first three days of this week on the Nymex. The futures are up 10 percent this year.
The market was closed yesterday in observance of the July 4th U.S. Independence Day holiday. Any electronic trades will be booked for today.
Power plants will account for 32 percent of U.S. gas consumption this year and are the biggest users of the fuel in the lower 48 states, said the Energy Information Administration, the Energy Department’s statistical arm.
U.S. gas stockpiles increased 72 billion cubic feet to 2.605 trillion in the week ended June 28, above the five-year average gain for the period of 71 billion, according to EIA data. Analyst estimates compiled by Bloomberg predicted a gain of 74 billion.
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
3 5 4
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org