(Updates weather forecast in the third paragraph and prices in the fifth.)
Aug. 16 (Bloomberg) -- Natural gas futures may advance next week on forecasts for hotter weather that would stoke demand for the power-plant fuel.
Eight of 15 analysts, or 53 percent, predicted that futures will increase on the New York Mercantile Exchange through Aug. 23. Six, or 40 percent, said gas will stay the same and one said prices will decline. Last week, 62 percent of participants said gas would fall.
The Northeast and Midwest will see above-normal temperatures Aug. 21 through Aug. 25 following cooler readings this week, said MDA Weather Services in Gaithersburg, Maryland. Gas rebounded 7.6 percent from a six-month intraday low on Aug. 8 following the warmer outlook and a government report yesterday that showed a smaller-than-forecast supply gain.
“The weekly injections are beginning to realign with the five-year average levels,” said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “This will likely leave less working gas in storage at the end of the season than the market expects.”
Natural gas futures climbed 13.8 cents, or 4.3 percent, to $3.368 per million British thermal units this week on the Nymex, capping the first gain in four weeks and the largest percentage increase since May 24. The futures are up 0.5 percent this year.
The high in Boston on Aug. 23 may be 89 degrees Fahrenheit (32 Celsius), 10 above normal, according to AccuWeather Inc. in State College, Pennsylvania. Temperatures in Kansas City, Missouri may reach 93 Fahrenheit, 5 higher than average.
Power generation accounts for 32 percent of U.S. gas demand, according to the Energy Information Administration, the Energy Department’s statistical arm.
U.S. inventories rose 65 billion cubic feet in the week ended Aug. 9 to 3.006 trillion, the EIA said yesterday. Analyst estimates compiled by Bloomberg predicted a gain of 70 billion. The five-year average increase for the period is 42 billion. A supply surplus to the average widened to 1.2 percent from 0.7 percent the previous week.
The EIA expects stockpiles to peak at 3.8 trillion cubic feet before the start of the next heating season, the peak demand period for U.S. gas, according to the government’s Short- Term Energy Outlook released Aug. 6.
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 gas futures will probably rise, fall or remain neutral in the coming week. This week’s results were:
RISE FALL NEUTRAL
8 1 6
--Editors: Margot Habiby, Charlotte Porter