DJ Natural Gas Supply and Cool Weather Keep Lid on Prices
By Timothy Puko
Natural gas prices slid to a one-month intraday low Tuesday, as cooler weather forecasts and stubbornly high supply
keep weighing on prices.
Natural gas for September delivery fell 2.8 cents, or 1%, to $2.70 a million British thermal units on the New York
Mercantile Exchange. Prices had fallen as low as $2.68, nearing the bottom of a 31-cent range they have traded in for
more than two months.
Summer prices are closely tied to heat because consumption usually rises as people turn on their air-conditioning
units and ramp up demand for gas-powered electricity. Tuesday's forecasts show a retreat of some above-normal
temperatures that had been predicted for the East Coast next week. Instead, a larger-than-expected patch of
below-normal temperatures could cap gas demand next week from Nebraska to Ohio, private forecasts show.
Though demand is likely to be static or start a decline, few expect production to follow. It has plateaued at around
73 billion cubic feet to 74 billion cubic feet a day, with efficiency gains, new pipelines, growing production in the
Gulf of Mexico and an uptick in oil drilling that could also produce gas all conspiring to keep production strong,
Energy Aspects, a research consultancy, said in a note.
"A sharp downturn in production is off the cards," it said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.72/mmBtu, compared with Monday's
range of $2.745-$2.7775. Cash prices at the Transco Z6 hub in New York last traded at $2.75/mmBtu, compared with
Monday's range of $2.85 to $2.90.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 18, 2015 10:31 ET (14:31 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
081815 14:31 -- GMT
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