BLBG: Natural Gas Futures May Climb as Colder Weather Boosts Fuel Use
Natural gas may advance next week as forecasts show colder weather that would boost heating fuel consumption, a Bloomberg survey showed.
Four of nine analysts, or 44 percent, said that futures will rise on the New York Mercantile Exchange through Dec. 21. Three, or 33 percent, said gas will drop and two predicted prices will stay the same. Last week, 55 percent of participants said gas would fall this week.
WSI Corp. in Andover, Massachusetts, predicted normal or below-normal temperatures in the eastern half of the U.S. from Dec. 23 through Dec. 27. The low in New York on Dec. 27 may be 27 degrees Fahrenheit (minus 3 Celsius), 2 lower than usual, according to AccuWeather Inc. Gas slipped to $3.293 per million British thermal units in intraday trading yesterday, the lowest level since Sept. 28.
“I’m expecting colder weather to happen, especially as we get into January,” said John Woods, president of JJ Woods Associates and a Nymex floor trader. “The market is probably going to try to bounce back after dipping below the $3.30 mark.”
Natural gas has tumbled 20.4 cents, or 5.7 percent, to $3.347 per million Btu so far this week in New York. Prices last week fell 0.3 percent and are up 12 percent this year.
A government report yesterday showed that U.S. stockpiles climbed unexpectedly amid mild weather, rising 2 billion cubic feet in the week ended Dec. 7 to 3.806 trillion. Analyst estimates compiled by Bloomberg predicted a withdrawal of 3 billion cubic feet. The five-year average decline for the period was 113 billion.
The gas survey has correctly forecast the direction of prices 49 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:
