(Updates prices in fifth paragraph.)
June 17 (Bloomberg) -- Natural gas futures may decline as moderating temperatures reduce demand for the power-plant fuel, a Bloomberg News survey showed.
Ten of 20 analysts, or 50 percent, forecast that gas futures will fall on the New York Mercantile Exchange through June 24. Five, or 25 percent, said futures will rise and five predicted that prices will stay the same. Last week, 71 percent of participants said gas prices would drop.
Mostly normal temperatures are likely in the Midwest from June 21 through June 25, according to Commodity Weather Group LLC in Bethesda, Maryland. Normal temperatures are also likely in the upper Midwest June 26 through June 30, the company said.
“With cooler temperatures coming into the picture, not to mention the return of large nuclear power capacity, I think there’s more downside to go for July gas futures,” said Alan Lammey, natural gas markets analyst at WeatherBell Analytics LLC in Houston. “I’m looking for support to emerge between the $4.35 to $4.25/MMBtu area.”
Natural gas for July delivery fell 43.2 cents, or 9.1 percent, to $4.325 per million British thermal units this week on the New York exchange.
The high temperature in Chicago on June 23 may be 76 degrees Fahrenheit (24 Celsius), 7 below normal, according to AccuWeather Inc. in State College, Pennsylvania.
U.S. nuclear-power production rose to the highest level in more than three months after reactors started in Illinois, Virginia and Wisconsin, the Nuclear Regulatory Commission reported yesterday.
Power generation increased 159 megawatts from June 15 to 92,172 megawatts, or 91 percent of capacity, according to the NRC report and data compiled by Bloomberg. That’s the most since March 3. Seven of the 104 U.S. reactors were offline.
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
5 10 5
--With assistance from Colin McClelland in Toronto. Editors: Bill Banker, Charlotte Porter
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 email@example.com