Natural gas may set new 2012 high as supplies fall, survey shows

Natural gas futures may rise next week after reaching a one-year high yesterday as colder weather helps reduce a stockpile surplus of the heating fuel, a Bloomberg survey showed.

Eight of 16 analysts, or 50 percent, forecast that futures will advance on the New York Mercantile Exchange through Nov. 23. Seven, or 44 percent, said gas will fall and one said prices will stay the same. Last week, 62 percent of participants said gas would drop this week.

U.S. gas stockpiles fell 18 billion cubic feet in the week ended Nov. 9, the earliest decline for a heating season since 2007, after expanding to a record 3.929 trillion cubic feet the previous week, an Energy Department report yesterday showed.
Temperatures in the eastern half of the U.S. will be normal or lower over the next 11 to 15 days, according to MDA EarthSat Weather in Gaithersburg, Maryland.

“The storage numbers were impressive enough, given the kind of weather we had,” said Tom Saal, senior vice president of energy trading at INTL Hencorp Futures LLC in Miami.

Natural gas for December delivery has advanced 20 cents, or 5.7 percent, to $3.703 per million British thermal units so far this week this week in New York. The contract rose to $3.83 yesterday, the highest intraday price since Nov. 4, 2011. The futures are up 8.8 percent from a year ago.

“The market is still in an uptrend, even though we made a new high and then it fell down a little bit,” Saal said.

Cold Weather

The low in Detroit on Nov. 29 may be 19 degrees Fahrenheit (minus 7 Celsius), 12 below normal, while New York temperatures drop 11 below normal to a low of 27 degrees, according to AccuWeather Inc. in State College, Pennsylvania.

The heating season from November through March is the peak period for U.S. gas consumption. About 50 percent of U.S. households use gas for heating, according to the Energy Department.

Gas stockpiles totaled 3.911 trillion cubic feet last week, 5.6 percent above the five-year average for the period, the department said yesterday. The supply gap narrowed from 6.6 percent the previous week.

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: