Investment firms trim 2013 US gas price forecasts on winter warmth
Investment bank Goldman Sachs on Monday cut its 2013 US natural gas price forecast to $3.75/MMBtu form $4.25/MMBtu, saying mild winter weather across the US has failed to put a serious dent in storage levels.
The bank said higher levels of coal-to-gas switching in the power sector would be needed to avoid approaching storage capacity by the end of the 2013 injection season, meaning that "natural gas will need to price lower."
"We now expect 2.4 Bcf/d of coal-to-gas switching will be needed on average in 2013 to reach comfortable inventory levels of 3.85 Tcf by the end of the summer, up from 2.1 Bcf/d previously," Goldman said.
Goldman said it expects gas prices to average $3.25/MMBtu in the first quarter, $3.75/MMBtu in the second quarter, $3.75/MMBtu in the third and $4.25/MMBtu in the fourth. It predicted the average price in 2014 will be $4.25/MMBtu.
The bank said its current 2013 price outlook is "bullish" relative to the average forward curve price of $3.50/MMBtu.
Also on Monday, Raymond James and Jefferies & Co. cut their gas price estimates, citing mild December temperatures and forecasts calling for normal to above-normal temperatures across key eastern US market areas....MORE
