DJ Natural Gas Holds Steady Despite Cooler Outlook
By Christian Berthelsen
Natural-gas prices wavered Monday as weather forecasts for the last half of
August continued to point to cooler weather.
Natural gas for September delivery was up half a cent, or 0.1%, at $3.781 a
million British thermal units on the New York Mercantile Exchange, after
slipping to $3.727 in early trade. Prices are now 20% below their mid-June
peak, as robust inventory growth has disproven market views that high summer
cooling demand would strain supplies.
"As we shuffle away from the peak of summertime and toward the peak of
hurricane season, both have been lacking in their usual bullish impact,"
Schneider Electric analyst Matt Smith said in a note.
Temperatures along the Eastern Seaboard continued to moderate in the two-week
outlook, and a Canadian storm formation is expected to sweep down across the
northern U.S., further reducing demand for natural gas. Utilities use gas to
generate electricity, and demand rises in hot weather to cool offices and
homes.
Traders are looking ahead to weekly storage data on Thursday from the U.S.
Energy information Administration, which is expected to show yet another
addition to stockpiles that is much higher than average. Current inventory
levels are 19% below average levels, but more than two months remain for
utilities to add supplies to storage before demand for gas to heat homes kicks
in.
In the physical market, cash prices for next-day delivery at the Henry Hub
benchmark in Louisiana last traded at $3.755 a million British thermal units,
compared with Friday's range of $3.72-$3.795. Physical gas at the Transco Z6
hub in New York traded in a bid-offer spread of $2.30-$2.73, compared with
Friday's range of $1.99-$2.18.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
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(END) Dow Jones Newswires
August 18, 2014 09:26 ET (13:26 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
081814 13:26 -- GMT
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