SG:Natural Gas Futures May Decline on Mild Weather, Survey Shows
May 20 (Bloomberg) -- Natural gas futures may decline as mild weather reduces air-conditioning use, limiting demand for the fuel from power plants, a Bloomberg News survey showed.
Eight of 18 analysts, or 44 percent, forecast that gas futures will fall on the New York Mercantile Exchange through May 27. Six, or 33 percent, said futures will rise and four predicted that prices will stay the same. Last week, 42 percent of participants said gas prices would advance.
Normal or below-normal temperatures are likely across most of the continental U.S. from May 24 through May 28, according Commodity Weather Group in Bethesda, Maryland. Temperatures in the Midwest may be as much as 8 degrees below normal, the company said in a note to clients today.
"The market may be vulnerable for a downside test of the $4 level or even somewhat lower on a further round of long liquidation," said Tim Evans, an energy analyst at Citi Futures Perspective in New York. "We currently lack any specific forecast for a heat wave or early hurricane tracking through the Gulf of Mexico that would ward off renewed price weakness."
Natural gas for June delivery dropped 15.2 cents, or 3.6 percent, to $4.094 per million British thermal units in the first four days of trading this week on the New York exchange.
The high temperature in Chicago on May 27 may be 71 degrees Fahrenheit (22 Celsius), 4 below normal, according to AccuWeather Inc. in State College, Pennsylvania.
There is a 47 percent chance of a hurricane hitting the Gulf Coast during the 2011 storm season, Colorado State University forecasters said April 6. The season starts June 1 and ends Nov. 30.
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:
