Natural gas may rise next week as an unusually cold start to spring sparks demand for heating fuel, a Bloomberg survey showed.
Seven of 11 analysts, or 64 percent, forecast that futures will advance on the New York Mercantile Exchange through April 5. Four, or 36 percent, said gas will decline. Last week, 50 percent of participants said gas would drop.
Temperatures will be below normal across most of the eastern two-thirds of the U.S. next week, according to Commodity Weather Group LLC in Bethesda, Maryland. Gas futures have jumped 17 percent this month as unusually frigid March weather bolstered demand at the end of the heating season.
“You are still seeing some continued demand from this very cold winter weather,” said Carl Neill, a consultant with Risk Management Inc. in Atlanta. “The weekly storage reports over the past month have been very bullish not only in relation to last year’s drawdowns but with previous years. The trend can continue this week and maybe even next week.”
Natural gas futures climbed 14.1 cents, or 3.6 percent, to $4.068 per million Btu during the first three days of this week in New York, settling above $4 for the first time since Sept. 14, 2011. Gas is headed for its sixth consecutive weekly gain, the longest streak since an eight-week gain that ended Oct. 30, 2009. Prices are up 21 percent this year.
The market will be closed tomorrow in observance of Good Friday.
The low temperature in Minneapolis on April 1 may be 22 degrees Fahrenheit (minus 6 Celsius), 9 below normal, while Boston’s low the next day may be 32 degrees, 4 below the norm, according to AccuWeather Inc. in State College, Pennsylvania.
About half of U.S. households use gas for heating, according to the Energy Information Administration, the Energy Department’s statistical arm.
Gas stockpiles probably fell by 90 billion cubic feet in the week ended March 22, according to the median of 19 analyst estimates compiled by Bloomberg. The five-year average change for the week is a gain of 6 billion, EIA data show. The agency is scheduled to release its weekly storage report today at 10:30 a.m. in Washington. Last year, supplies rose by 45 billion during the period.
U.S. stockpiles totaled 1.876 trillion cubic feet in the week ended March 15, the EIA said last week. The year-over-year deficit widened to 21 percent from 12 percent at the end of February, the most since April 2008. A supply surplus to the five-year average narrowed to 9.5 percent from 11.4 percent.
The gas survey has correctly forecast the direction of prices 50 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
7 4 0
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