Analysts expect recent downward trend in US gas prices to reverse

Analysts expect recent downward trend in US gas prices to reverse

Washington (Platts)--16Jul2004


The recent bearish trend in US natural gas prices likely will dissipate in the
coming weeks, according to a report from Stifel Nicolaus in Denver. "Although
apparent demand destruction has increased in the last few weeks, on a
weather-adjusted basis injections have only been 1 Bcf/d higher than normal
this cooling season," Stifel Nicolaus analysts David Tameron and Michael
Jacobs said. "Once we enter the dog days of July/August, we expect the recent
trend to reverse itself." The analysts pointed to a growing economy and
significant electricity demand growth for strength in gas demand, "with little
if any fuel switching available or economic." The analysts raised their 2004
gas price forecast to $6.00/Mcf from $5.45/Mcf, and raised their 2005 price
forecast to $5.50/Mcf from $5.20/Mcf. For crude oil, the analysts projected a
price of $35.66/bbl in 2004 and $32.00/bbl in 2005.

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