DJ Natural Gas Prices Rise on Hot Weather Forecasts
By Timothy Puko
Natural-gas prices rose to a near-one-month high Tuesday as warm weather forecasts continue to raise expectations for
strong demand.
Consumption of gas-powered electricity rises in the summer as people turn on their air-conditioning units. Though the
weather has been fairly mild in recent weeks, recent forecasts predict above-normal temperatures spreading in the next
two weeks across large parts of the country, especially concentrated in the Southeast.
Natural gas for August delivery rose 5.8 cents, or 2%, to $2.922 a million British thermal units on the New York
Mercantile Exchange. Tuesday's trading set a new high for intraday prices dating back to June 17. Gas is up 8.8% in
four sessions.
Stronger consumption is likely to limit the amount of gas going into storage every week. Stockpiles are still at
above-average levels after a surge in production and a record amount of additions kept stockpiles healthy throughout
the winter. The amount going into storage has been a big factor in prices this year and traders are keeping a close
watch on weather trends to see how they will influence supply.
The hot spell "will continue to cut that surplus to last year. That's a little bullish," said Kyle Cooper, managing
director of research at IAF Advisors, a Houston consulting firm.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.95/mmBtu, compared with Monday's
range of $2.85 to $2.91. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $1.75/mmBtu to
$2.75/mmBtu, compared with Monday's range of $2.75 to $2.89.
--Nicole Friedman contributed to this article.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
July 14, 2015 09:27 ET (13:27 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
071415 13:27 -- GMT
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