DJ Natural Gas Boosted by Rising Demand for Gas-Fired Power
By Timothy Puko
Natural gas is rallying for a fifth straight session as power demand and traders who move on charts are still pushing
up the market, analysts said.
Prices for the front-month June contract rose 0.5 cent, or 0.2%, to $3.021 a million British thermal units on the New
York Mercantile Exchange. Gas had seen losses for most of the morning but flipped to gains after floor trading opened,
rising to a new high for intraday trading dating back to Jan. 22.
Gas's bull run for three weeks has been broadly attributed to rising demand for gas to fuel electricity generation
and by money managers rushing away from what had been a one-sided bet that prices would fall. Hot weather and the
closings of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy
back contracts they had sold to close out bearish bets before they could go wrong, feeding a rally.
Those factors are still at play Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates,
said in a note.
"At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, he said. "But, such a development can be a slow mover."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.045/mmBtu, compared with Friday's
range of $2.94-$2.975. Cash prices at the Transco Z6 hub in New York last traded at $3.125/mmBtu, compared with
Friday's range of $2.49 to $2.80.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
May 18, 2015 09:53 ET (13:53 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051815 13:53 -- GMT
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