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Natural gas futures may decline next week as temperatures rise following a nor’easter this week, crimping demand for heating fuels, a Bloomberg survey showed.
Eight of 13 analysts, or 62 percent, forecast that futures will fall on the New York Mercantile Exchange through Nov. 16. Three, or 23 percent, said gas will rise and two said prices will stay the same. Last week, 53 percent of participants said gas would drop this week.
Temperatures in the northern half of the U.S. will be above normal from Nov. 14 through Nov. 22, following freezing weather and snow in some regions this week, according to the National Weather Service. Gas inventories typically start to decline in November as demand for heating fuels picks up.
“It’s been very cold this week and next week is going to be exceptionally warm,” said Chris Kostas, senior power and gas analyst for Energy Security Analysis Inc. in Andover, Massachusetts. “The Thanksgiving week report could very easily show an injection. The short-term trend is down.”
Natural gas for December delivery dropped 5.1 cents, or 1.4 percent, to $3.503 per million British thermal units this week in New York. The futures are up 17 percent this year.
The low in New York City on Nov. 20 may be 50 degrees Fahrenheit (10 Celsius), 10 above the usual reading, according to AccuWeather Inc. in State College, Pennsylvania. Chicago’s low may be 10 above normal at 42 degrees.
About 50 percent of U.S. households use gas for heating, according to the Energy Department.
U.S. gas stockpiles expanded last week by 21 billion cubic feet to 3.929 trillion cubic feet, an all-time high based on data going back to 1993, the Energy Department reported yesterday. A supply surplus to the five-year average fell to 6.6 percent from 7.1 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:
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