Natural Gas May Decline on Nuclear Start-Ups, Survey Shows

Natural gas futures may decline on reduced demand for the fuel as nuclear power plants restart after shutting for maintenance and refueling, a Bloomberg News survey showed.

Ten of 17 analysts, or 59 percent, forecast that gas futures will fall on the New York Mercantile Exchange through May 13. Four, or 24 percent, said futures will stay the same and three predicted that prices will rise. Last week, 47 percent of participants said gas prices would advance.

U.S. nuclear-power production was 69 percent of capacity yesterday, according to the Nuclear Regulatory Commission and data compiled by Bloomberg. The atomic shutdowns have boosted gas demand for electricity generation, reducing injections into underground gas storage, said Brian Swan, an analyst with Summit Energy in Louisville, Kentucky.

“We’ve seen a couple of weeks of small storage injections as gas fills the gap for nuclear power, but we’ve going to see that flip-flop,” Swan said. “We had been gearing up for a downturn.”

Natural gas for June delivery dropped 46.3 cents, or 9.9 percent, to $4.235 per million British thermal units this week on the New York exchange.

Nuclear Power

Nuclear output neared a 12-year low on May 2 as reactors shut in New Jersey, Minnesota and California. Gas inventories increased 72 billion cubic feet last week, compared with analysts’ predictions of 67 billion, the Energy Department said in a report yesterday.

Futures may also slip after failing to rise to $5, a level prices haven’t reached since August 2010, Swan said. Price gains were slowing even as futures hit a 13-week high this week, suggesting a drop was imminent, he said.

The gas survey has correctly forecast the direction of prices 48 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 10 4