Natural-Gas Prices May Fall; Healthy Supplies, LNG Imports Spur Forecasts
Natural-gas prices are poised for a drop.</br></br>The bulk of winter heating season has passed, barely making a dent in domestic supplies in storage, which are 3.1% above the five-year average. Putting further pressure on prices are expectations that U.S. production as well as imports in the form of liquefied natural gas will increase this year.</br></br>Natural gas for March delivery settled 10.8 cents, or 1.4%, higher at $8.102 a million British units on the New York Mercantile Exchange yesterday following a report showing that U.S. inventories declined more than expected last week.</br></br>Even so, gas-futures prices are expected to stay in the range of $7- $7.75 a million British thermal units during the next six weeks, until the official end of winter heating season.</br></br>"U.S. supply is going to be up big," said J. Marshall Adkins, a Houston-based analyst with Raymond James. "We still think LNG will be up somewhat and a combination of those two things is going to drive summer storage levels higher than last year," leading to record levels of gas in storage.