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Chesapeake Energy Corporation Message Board

  • bluecheese4u bluecheese4u Jun 6, 2013 9:26 AM Flag

    Summer To Bring Upward Pressure on Natural Gas Prices, Suppliers Say

    Summer To Bring Upward Pressure on Natural Gas Prices, Suppliers Say

    By Tennille Tracy
    June 5, 2013, 12:00 a.m. ET

    WASHINGTON--The Natural Gas Supply Association is predicting upward pressure on natural gas prices this summer, when compared with 2012, but says demand will be slightly lower than last summer.

    In its annual summer outlook assessment, released Wednesday, the association forecasts "slightly increased pressure on natural gas prices," due largely to the need to fill storage at a faster rate than last summer.

    NGSA, which represents natural gas suppliers and marketers, doesn't provide actual price forecasts. Henry Hub prices averaged $2.70 during the summer of 2012.

    Demand for natural gas will be somewhat lower in the 2013 summer months, however not enough to affect pricing, NGSA says. The association sees lower demand for natural gas in the power sector, resulting from cooler temperatures and "significantly" less coal-to-gas switching among utilities.

    The association projects an average demand of 62 billion cubic feet per day over the summer. The power sector has consumed greater quantities of natural gas to generate electricity, in large part because gas prices have dropped to years-long lows. NGSA says the long-term forecast suggests that will continue to be the case.

    NGSA forecasts natural gas production will be slightly higher this summer, setting yet another record. There will be less drilling activity, the association says, but that decline will be offset by the construction of new pipelines and processing plants that are capable of carrying "previously stranded" natural gas away from the Marcellus Shale region and other production areas.

    "This new infrastructure is forecasted to keep supply at a high level that is similar to last summer," NGSA chairman Greg Vesey said in a statement.


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