DJ Natural-Gas Rally Gets Boost From Warming Weather Forecasts
By Timothy Puko
NEW YORK--Natural-gas prices closed higher Monday with a late-season burst of
summer heat expected to boost demand.
The front-month September contract settled up 9.7 cents, or 2.5%, to $3.937 a
million British thermal units on the New York Mercantile Exchange. Trading for
the October contract surpassed trading for the September contract. September
options expire Tuesday, and the contract expires Wednesday. The October
contract rose 9.6 cents, or 2.5%, to $3.979/mmBtu.
The front-month contract gained 5.6% in the week since intraday trading Aug.
18 fell to nearly a nine-month low. Monday's climb brought gas back near the
top of a 30-cent range it has traded within for more than a month.
The biggest jump came Monday, and entirely from the weather, analysts said.
Weather Services International in Andover, Mass., issued a heat alert for a
swath of the country spanning from West Texas to Detroit and Cleveland. Summer
heat makes it more likely people will use their air conditioners, consuming
more gas-fired electricity.
Forecasters said that heat is likely to stick around, too, with predictions
for September to start warmer than expected. Except for the Rocky Mountain
region, the entire country is likely to see temperatures two to eight degrees
Fahrenheit above normal through Sept. 8, according to MDA Weather Services.
"Meteorologists came out of their holes and predicted at least one more week
of summer," Aaron Calder, senior market analyst at energy-consulting firm
Gelber & Associates in Houston, said in a note. "We haven't seen significant
cooling demand like this since the first half of June."
The gains could be tenuous. Forecasters at NatGasWeather.com said Canadian
weather systems could weaken the heat expected both this week and next week.
"The pattern is sloppy, so expect daily changes in weather models and
national forecasts on how the situation unfolds," they said in their afternoon
update.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 25, 2014 15:05 ET (19:05 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
082514 19:05 -- GMT
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