Natural Gas Could Slump To $1.50 -SocGen

Published: Feb 03, 2012

(Dow Jones) Societe Generale cuts its 2012 US natural-gas price forecast by 50c to a 13-year lower of $2.40/MMBtu. Even that weak price view is based on the "critical assumption, not supported by current production indicators," that record-high output will be curtailed. SocGen expect prices to bottom at $1.90 in May, but "easily" could touch $1.50 if supply keeps rising. It also projects an average spring price of $2 might lead to 4B cubic feet/day of output cuts and a 6Bcf/day demand increase from power plants switching to natural gas from coal. That would help lift prices to $3 by December. SocGen also sees Nov. 30 natural-gas inventories topping out at 3.9Tcf; capacity is 4.3T. March futures are down 6.5c at $2.49. (david.bird@dowjones.com)

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