DJ Natural Gas Prices Continue to Climb on Expected Summer Demand
By Nicole Friedman
NEW YORK--Natural-gas prices continued to soar Thursday on expectations that summertime demand for air-conditioning
will increase gas usage.
Hot weather boosts demand for gas-powered electricity to run air-conditioning units in homes and offices. Forecasts
for the next two weeks released Thursday showed hotter temperatures than previously expected, according to MDA Weather
Services.
Natural gas for July delivery recently rose 1 cent, or 0.4%, to $2.391 a million British thermal units on the New
York Mercantile Exchange. Prices are up more than 20% from May 26.
Traders are also looking at signs that production is declining after years of low prices have prompted companies to
cut spending on new drilling.
"With the weather once again changing to another warming trend, the market is looking for a bump up in consumption at
a time when production may be starting to ease," said Dominick Chirichella, analyst at the Energy Management Institute,
in a note.
The natural-gas market is oversupplied due to high production and sluggish demand this winter. Inventories as of May
20 stood 37% above the five-year average for this time of year, according to the Energy Information Administration.
The EIA is set to release its inventory data for the week ended May 27 at 10:30 a.m. ET. Analysts surveyed by The
Wall Street Journal expect the agency to report that inventories rose by 86 billion cubic feet in the week, a smaller
injection than is typical for this time of year.
If the storage estimate is correct, inventories as of May 27 totaled 2.6 trillion cubic feet, 20% above levels from a
year ago and 23% above the five-year average for the same week.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
June 02, 2016 09:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
060216 13:55 -- GMT
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