Natural Gas Futures Decline on Outlook for Rising Production

2011-5-26

Natural gas futures fell, heading for their first monthly decline since February, on speculation that demand from power plants won’t be strong enough to surpass rising supplies of the fuel.

Gas dropped for the first time in three days as the Energy Department forecasts record gas production in 2011. Output may rise 2.3 percent to 63.2 billion cubic feet a day this year, the department’s May 10 Short-Term Energy Outlook showed. Prices had risen as a drop in the number of active drilling rigs spurred speculation that production would decline.

“We’ve had a move down in gas rigs, but generally speaking we’re well above the 800 to 825 number where you’d actually see an impact to natural gas production,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “The expectation is that we’ll have plenty of gas in storage at the end of the summer.

Natural gas for June delivery fell 0.1 cent to settle at $4.345 per million British thermal units on the New York Mercantile Exchange. The futures have declined 7.5 percent this month.

“Near-term demand growth aside, robust gas supply should remain a headwind for gas prices,” analysts including Cameron Horwitz at Canaccord Genuity in Houston said in a note to clients today.

Gas rigs fell by 8 to 866 last week, the lowest level since the week ended Jan. 29, 2010, according to data from Houston- based Baker Hughes Inc.

 相关文章
互联网信息服务许可证号: 京ICP证020082号 广告经营许可证: 京海工商广字第0410号
工商红盾网站注册标号: 010202002052000296号  公安机关备案编号:北京市海淀分局1101081633