DJ Natural Gas Extends Gains as Forecast Heats Up
By Christian Berthelsen
Natural gas prices rose Monday as temperature forecasts heated up for the coming weeks, raising expectations for
power generation demand to meet air conditioning needs.
Natural gas futures ended 4.7% higher at $2.7470 a million British thermal units on the New York Mercantile Exchange,
on pace for a second straight gaining session. Natural gas prices have jumped 40% since late May as expectations have
grown that hot summer weather will lead to heavy demand. Natural gas is a key source fuel for power plants to generate
electricity.
Updated forecasts released Monday said temperatures in the Midwest and eastern seaboard will be warmer than
previously expected going into the July 4 holiday weekend. Meanwhile, the southwest has already been hit with punishing
temperatures, hitting 118 degrees Fahrenheit in Phoenix Sunday and 109 degrees in Burbank, Calif.
Analyst said much of Monday's jump appeared to be driven by short sellers closing out bearish bets against the
market, as well as trading based on technical analysis that shows the market may be poised for more gains.
"The first calendar day of summer is tomorrow, and we've got the prime summer months before us," said Gene McGillian,
senior analyst at brokerage Tradition Energy.
Though demand is expected to be brisk, the market remains well-supplied after a meek winter season that sapped demand
for gas-fired heating. U.S. Energy Department data released last week said stored inventories of natural gas are more
than 3 trillion cubic feet, 30% more than average for this time of year.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
(END) Dow Jones Newswires
June 20, 2016 15:26 ET (19:26 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
062016 19:26 -- GMT
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