Tradition Energy on Wednesday blamed “the poor prospect of economic growth in the second half of the year” in revising its natural gas price forecast for 2010 down to $4.85/Mcf from $5.25.

Crude oil prices, however, are forecast to be $75/bbl, compared with an earlier estimate of $71.

The oil price “has been tightly correlated with strength in equity markets, which have consistently priced in potentially better economic growth, despite decidedly mixed economic data,” Tradition analysts noted.

“Natural gas, on the other hand, has been the one energy commodity most attuned to supply and demand. Increasing production from shale gas plays throughout the country has been more than sufficient to offset elevated demand from power generators due to hot summer temperatures throughout most of the country, while industrial demand for natural gas continues to lag 2008 levels.”

Addison Armstrong, the senior director of market research for Tradition, said many factors contributed to the revised estimates, “including the European debt crisis, lackluster manufacturing activity and consumer confidence in the U.S., and slowing GDP [gross domestic production] growth in China.

“As a result, energy prices slipped lower and then stagnated, unable to gain direction as nearly all markets appeared to be oversupplied. Natural gas, despite a brief rally in June, has been in a downtrend all year due to abundant supplies and increasing production.”

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