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Friday, August 24, 2012

Natural gas prices forecast 2012 - 2013

Natural gas prices forecast 2012 - 2013, gas prices predictions summer 2013, nat gas forecast 2013, average gas prices 2012 - 2013 : Natural-gas futures fell to a two-month low in New York amid speculation that Tropical Storm Isaac won’t result in widespread production cuts in the Gulf of Mexico. Gas slid 3.6 percent, the biggest one-day drop since Aug. 10. The National Hurricane Center forecast Isaac may become a hurricane off the west coast of Florida in about four days, according to a 2 p.m. advisory. The Gulf accounted for about 7 percent of U.S. gas production in 2011 compared with 11 percent in 2008.

Gas for September delivery dropped 10 cents to $2.702 per million British thermal units on the New York Mercantile Exchange, the lowest settlement price since June 25. The futures slid 0.6 percent this week, capping losses for a fifth straight week. Gas is down 9.6 percent this year.

Natural gas is expected to be oversupplied in 2012 and will pressure prices

Natural gas will likely be over-supplied in 2012 despite a slowdown in production. Slowing demand is however likely to build higher year-over-year inventories which will impact prices. Slowing gas-directed drilling may help tighten balances towards the end of the year.

2012 average year price:
$2.40 / million BTUs

2013 average year price:
$3.95 / million BTUs

analysts at Goldman Sachs
analysts at Goldman Sachs to reaffirm their prediction for a natural gas price rebound in the summer of 2013, although the upcoming summer still remains a challenge.

The rally in summer 2012 prices "has gone too far," as lower prices are still needed to "motivate the record high levels of coal-to-gas substitution necessary to avoid storage capacity this summer

Canadian imports are expected to stabilize in 2013-2014, before the potential pull of liquefied natural gas exports, which would again reduce the amount of gas available to import into the US,

Goldman issued a call for hedging longer-dated natural gas by end-users in advance of the rebound.

"Specifically, we expect the slower production growth combined with a return to more normal winter weather next year will reduce the amount of price-induced coal-to-gas substitution required," the analysts said. Thus, prices can move back to $4/MMBtu "relatively quickly as the amount of switching is reduced to around 2.5 Bcf/d."

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