Why Natural Gas Will Stay Cheap in 2013

Photograph by Simon Dawson/Bloomberg

Six weeks ago, natural gas bulls were riding high. By Thanksgiving, prices had more than doubled since hitting a decade low of $1.90 per million BTUs in April. Heading into what was supposed to be a cold winter for the U.S.—at least compared with last year—the consensus view was that natural gas prices would be higher in 2013, since about half of all U.S. households heat their homes with natural gas. By the end of December, the median forecast of 22 analysts surveyed by Bloomberg was that natural gas would average $3.75 for 2013.

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