Natural Gas Futures May Decline on Milder Weather, Survey Shows

Natural gas futures may fall on forecasts of moderating temperatures that would limit demand for the heating fuel, a Bloomberg News survey showed.

Eight of 17 analysts, or 47 percent, forecast that gas futures will drop on the New York Mercantile Exchange through March 18. Six, or 35 percent, said futures will rise and three predicted that prices will stay the same. Last week, 38 percent of participants said gas prices would advance.

Temperatures will be above normal from March 15 to March 19 across much of the country, according to the National Weather Service.

A seasonal first-quarter decline “has been with us for the last 30 days or so, and the market’s pretty well supported at $3.65,” said Brian Habacivch, senior vice president for research and publications at Fellon-McCord in Louisville, Kentucky. “I think the market’s going to find a near-term bottom.”

Natural gas for April delivery advanced 2.1 cents, or 0.6 percent, to $3.83 per million British thermal units in the first four days of trading this week on the New York exchange.

The high in New York on March 17 will be 59 degrees Fahrenheit (8 Celsius), 9 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Chicagomay be 50, 2 degrees above normal.

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

6 8 3

(Source: http://www.bloomberg.com/news/2011-03-11/natural-gas-futures-may-decline-on-milder-weather-survey-shows.html)