Friday, December 10, 2010

Bloomberg says that natural gas prices may climb in 2011

An aricle published by Bloomberg today stated that natural gas prices will climb in 2011. Natural gas prices may rebound as producers cut output for the first time in six years. The Energy Department said on Dec. 7 that there will be a decline in drilling and output will average 62.01 bcf/d in 2011, down from 62.09 bcf/d this year.

Jonathan Wolff of Credit Suisse Group AG is predicting an average price of $5.25 in 2011. "Production will flatten out in the next several months and then potentially start to decline after that, probably in the second half of the year," he said.

Jason Schenker, president of Prestige Economics, stated "Industrial demand is coming back already, storage withdrawals have been a bit larger than historical numbers even though new supplies are coming to market, which implies that demand is going up."

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