RBC Capital Markets slashed its price forecast for natural gas on Tuesday to $3.25 per mmBtu in 2015, representing a 13% decrease from its previous 2015 estimate.
The cut comes on a day in which natural gas futures for March ’15 delivery rallied $0.07 to settle at $2.74 per mmBtu. After falling for the past four trading sessions, the March ’15 delivery futures rose on the prospect of chilling cold persisting in February.
RBC also projected production to continue growing by 3.5% in 2015. According to RBC, the production growth will still come regardless of the steep decline in natural gas prices throughout most of the winter withdrawal season.
The forecast for production growth follows a small trend seen in recent Baker Hughes Rig Count Reports in which producers have added a total of 9 additional natural gas rigs in the past two weeks.
Natural gas traders and investors are looking for a winter extension and heavy withdrawals to see any rebound in prices before the end of the withdrawal season which tyically ends in April of each year.
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