Natural Gas Prices Seen at $2.60 in 2012, $3.35 in 2013 (UNG)

Analysts at Citigroup think natural gas prices will average $2.60 per million btu in 2012, up from $2.40, and $3.35 in 2013, down from $3.60.

This year nat-gas benefited from a hot summer that boosted electricity generator demand for gas to 2.3 billion cubic feet per day more than normal, which trimmed gains in inventory, noted the report. The reduced 2013 estimates account for a lower level of coal to gas switching by power plants and rising production from shale formations.

Natural gas futures are traded higher on Thursday, rising to $2.90 per million btu. United States Natural Gas ETF (NYSE: UNG) is higher by 2.25 percent.

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