DJ Natural-Gas Inches Up on Warm Weather Forecasts
By Timothy Puko
NEW YORK--Natural-gas prices are holding on to a small rally with help from a
heat wave likely to cover most of the country by Monday.
Natural gas for September delivery is up 0.5 cent, or 0.1%, at $3.97 a
million British thermal units on the New York Mercantile Exchange. Prices have
threatened to stay above $4/mmBtu for the first time in nearly a month, but
have fallen back after twice breaking that barrier this week.
"It's been a battle, but the market is starting to rally just a little bit,"
said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
"You're definitely finding right now a sweet spot for the market."
Several forecasts grew notably warmer Tuesday, causing the early buying,
analysts said. Heat causes people to turn on air conditioning and use more
gas-fired electricity, and the pattern developing for the weekend includes some
of strongest heat in what has been a mild season. Above-normal temperatures
would cover nearly all of the country by Monday, according to MDA Weather
Services.
The rally hasn't been stronger because traders aren't certain any demand
increase has staying power, analysts said. It's late in the summer and there
are signs that unseasonably cool weather could return from a Canadian cold
front pushing into view late next week. There are signs the buying is also from
technical traders or short-sellers, traders who bet prices would fall, buying
back in to close out their past bets, analysts said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded
at $3.91/mmBtu, compared with Monday's range of $3.84-$3.995. Cash prices at
the Transco Z6 hub in New York traded in a bid-ask range of $2.46/mmBtu to
$2.76/mmBtu, compared with Monday's range of $2.85 to $2.98.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 12, 2014 09:35 ET (13:35 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
081214 13:35 -- GMT
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