R.W. Beck’s second quarter gas price forecast could give bulls something to smile about, but bears might prefer to read the latest from Citigroup’s futures research department.

While year-to-date natural gas prices have averaged about 50 cents lower than R.W. Beck expected, the firm is still sticking with its forecast of an average $9/MMBtu for 2006. The reasoning: “lack of further price response to the extraordinarily warm winter, continued high oil prices and forecasted warm summer temperatures.”

But on the other hand, Citigroup notes that “absolute storage levels remain very bearish and the weather forecasts do not look to alleviate the storage overhang in the coming weeks. Hard to see a lot of upside unless big moves in petroleum futures continue.”

R.W. Beck noted that storage on March 31 was 140% above normal but said unusually warm weather in just November and January “created the bulk of the excess inventory.” January withdrawals were lower than normal even after accounting for weather, but in all other months the actual withdrawals matched weather-normalized expectations. The firm points to warmer-than-normal temperatures forecast for April-June and its expectation that oil prices will stay around the $63.30/bbl Nymex first quarter average. “We see no reason to expect lower oil prices — EIA’s [Energy Information Administration] latest Short-Term Outlook in fact now matches R.W. Beck’s….”

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.