DJ Natural Gas Regains Steam on Strong Demand Expectations
By Timothy Puko
Natural-gas prices jumped to a 10-day high overnight as warmer weather forecasts boost expectations for demand.
Natural gas for June delivery is up 3.5 cents, or 1.7%, at $2.097 a million British thermal units on the New York
Mercantile Exchange. The move helps reignite a rally that had retreated last week, and prices are now up 26% in the 2
1/2 months since they hit a 17-year low.
The summer months often bring higher demand for gas-fired power to run air conditioners, which has helped spur the
rally. Monday's weather updates show the beginning of summer-like weather in large parts of the country, and futures
jumped as soon as electronic markets opened Sunday evening, often a sign gas traders are reacting to weather updates.
MDA Weather Services in Maryland forecast highs of 70-degrees Fahrenheit from Chicago to New York throughout this
week and into early next week, and 80-degree highs in Dallas and Houston. High temperatures in Chicago and New York
will at times be more than 10-degrees above normal and feeds an increase in national energy demand, according to MDA
and Commodity Weather Group.
"We haven't had a hot summer in a few years, but if we do get one, people might be shocked about how much gas we use
in the summer," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "Natural gas is looking
more and more like it's hit bottom."
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
May 23, 2016 10:47 ET (14:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
052316 14:47 -- GMT
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