Natural Gas Futures May Gain on Lower Temperatures, Survey Says

By Reg Curren

Oct. 31 (Bloomberg) -- Natural gas prices may gain in the days ahead on speculation lower temperatures forecast for the Midwest may lift demand for the heating and power-plant fuel.

Six of 14 analysts in the survey, or 43 percent, said U.S. prices would rise through Nov. 7. Four, or 29 percent, said futures would fall. Four others predicted little change in prices. Last week, 60 percent of participants expected gas futures to increase.

``Colder temperatures are anticipated in the late 11-to 15- day period,'' said Guy Gleichmann, president of United Strategic Investors Group in Hollywood, Florida. Natural gas prices should ``easily challenge resistance at $6.80 to $7'' per million British thermal units.

Heating requirements tend to rise in late October and early November with cooler weather. Lower temperatures in the Midwest can be particularly significant for gas demand because 72 percent of households in the region rely on the fuel for heating.

Natural gas for December delivery gained 5 percent this week to settle at $6.783 per million Btu on the New York Mercantile Exchange.

The natural gas survey has correctly forecast the direction of prices 49 percent of the time since its June 2004 introduction.

     Bloomberg's survey of natural-gas analysts and
traders, conducted on Fridays, asks for an assessment of
whether Nymex natural-gas futures will probably rise, fall
or remain neutral in the coming week. This week's results
were:

                  RISE   FALL   NEUTRAL
                    6      4       4

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net