U.S. natural gas will average $3.85 per million British thermal units in the third quarter and $4.25 in the fourth quarter, below earlier forecasts as supply increases, Goldman Sachs Group Inc. (GS:US) said.
“Debottlenecking” at the Marcellus shale sites in West Virginia and Pennsylvania are among the drivers of supply gains, Goldman Sachs analysts led by Damien Courvalin in New York said in an e-mailed report today. Goldman previously forecast U.S. natural gas prices would be $4.50 in the third and fourth quarters.
Production gains may be “temporary” because the number of gas rigs operating is low, Goldman said. Natural gas prices need to increase to $4.25 per million Btu by 2014 to bring rigs back into active production and keep the market balanced, Courvalin said.
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