Natural Gas May Rise on Japanese LNG Demand, Survey Shows
March 25, 2011, 3:38 PM EDTBy Christine Buurma
(Updates prices in fifth paragraph.)
March 25 (Bloomberg) -- Natural gas futures may rise next week on speculation that damage to nuclear reactors in Japan after the March 11 earthquake will divert cargoes of the fuel from the U.S., a Bloomberg News survey showed.
Six of 14 analysts, or 43 percent, forecast that gas futures will rise on the New York Mercantile Exchange through April 1. Five, or 36 percent, said futures will fall and three predicted that prices will stay the same. Last week, 56 percent of participants said gas prices would gain.
The March 11 quake and resulting tsunami disabled about 25 percent of Japan’s nuclear power capacity, according to Goldman Sachs Group Inc. The country boosted spot imports of liquefied natural gas from the Atlantic Basin fivefold after a 2007 earthquake shut the Kashiwazaki-Kariwa nuclear plant.
“The market is expecting more natural gas consumption in Japan for electricity generation,” said Gordy Elliot, a risk- management specialist at FC Stone LLC in St. Louis Park, Minnesota. “Demand appears like it’s going to keep pushing along, and that gives us a little bit of a bullish tinge.”
Natural gas for April delivery rose 23.5 cents, or 5.6 percent, to settle at $4.403 per million British thermal units this week on the New York exchange. The futures are up 11 percent from a year ago.
Japan may need to import as much as 1.5 million metric tons of LNG scheduled for the Atlantic Basin to meet additional demand of 4.1 million tons, Bank of America Merrill Lynch said in a March 22 note to clients. Japan is the biggest user of LNG, accounting for 35 percent of global trade in 2009, according to BP Plc.
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 5 3
--With assistance from Rob Verdonck in London. Editors: Richard Stubbe, Dan Stets
To contact the reporter on this story: Christine Buurma in New York at Cbuurma1@bloomberg.net;
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
