Natural Gas Climbs in Survey on Colder Eastern U.S. Weather

Natural gas futures may advance next week on speculation that colder-than-normal Eastern U.S. weather will stoke demand for the heating fuel.

Seven of 12 analysts, or 58 percent, predicted that futures will rise on the New York Mercantile Exchange through Oct. 25. Four, or 33 percent, said gas will stay the same and one predicted prices will fall. Last week, 70 percent of participants said gas would advance.

The East Coast to the Rocky Mountains will see below-normal temperatures from Oct. 22 through Oct. 31, according to Commodity Weather Group LLC. A stockpile gain last week was probably closest to the five-year average in four weeks, based on analyst estimates compiled by Bloomberg. Data for last week was delayed because of the U.S. government shutdown.

“Based on the last forecasts I saw, it’s still going to start cooling down this weekend and into next week,” said Martin King, an analyst with FirstEnergy Capital Corp. in Calgary. “We will start to see some space-heating demand. Once we get the data, we will get a better sense of storage injections.”

Natural gas futures slipped 1.2 cents, or 0.3 percent, to $3.764 per million British thermal units this week on the Nymex, capping the third drop in four weeks. Prices climbed to $3.869 on Oct. 16, the highest intraday price since June 21. The futures are up 12 percent this year.

The EIA will release its gas storage report, which was originally scheduled for yesterday, on Oct. 22 and then resume normal Thursday releases, Jonathan Cogan, a spokesman for the government agency in Washington, said in an e-mailed statement yesterday.

Cold Weather

The cold push next week into the Midwest and also into the Deep South and the East is “the biggest event so far this heating season,” that will result in above-normal demand, Matt Rogers, president of CWG in Bethesda, Maryland, said in a note to clients yesterday.

The low temperature in Chicago on Oct. 24 may be 30 degrees Fahrenheit (minus 1 Celsius), 13 below normal, according to AccuWeather Inc. in State College, Pennsylvania. New York City will drop to 36 degrees, 12 lower than usual.

About 49 percent of U.S. households use gas for heating while 39 percent use electricity, according to the Energy Information Administration, the statistical arm of the Energy Department.

Supply Forecasts

Gas inventories probably expanded by 77 billion cubic feet in the week ended Oct. 11, based on the median of 17 analyst estimates compiled by Bloomberg. Expected gains ranged from 72 billion to 90 billion cubic feet. The five-year average increase for the seven days is 75 billion.

Inventories totaled 3.577 trillion cubic feet in the week ended Oct. 4, 1.6 percent above the five-year average for the period, EIA data show.

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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