DJ Natural Gas Rising on Warming Weather Forecasts
By Timothy Puko
NEW YORK--Natural-gas prices briefly surged Tuesday morning as updated
weather forecasts suggested warmer weather and a short-term bump in demand.
Natural gas for September delivery is up 8.7 cents, or 2.3%, at $3.879 a
million British thermal units on the New York Mercantile Exchange. The contract
bounced off of a nearly nine-month intraday low on Monday and has now returned
to the middle of its 23-cent trading range from the past month.
Several weather models are showing the potential for increased heat for the
next week, especially in the south and the Midwest. Hot weather leads to
increased demand for air conditioning and the gas-fired electricity that powers
it. There have also been recent signs that power plants are using a higher
proportion of gas, relative to coal, as gas prices have hit their lowest points
of the year.
"Perhaps there's a temporary bottom," said Anthony Lerner, senior vice
president of industrial commodities at brokerage R.J. O'Brien in New York. "I'm
not predicting any kind of big rally. But prices should bounce around within
this range for at least a while."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded
at $3.885/mmBtu, compared with Monday's range of $3.725-$3.795. Cash prices at
the Transco Z6 hub in New York traded in a bid-ask range of $2.58/mmBtu to
$2.65/mmBtu, compared with Monday's range of $2.65 to $2.78.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 19, 2014 09:39 ET (13:39 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
081914 13:39 -- GMT
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