DJ Natural-Gas Prices Jump to Two-Week High on Warming Weather -- Update
(Updates with cash tables at bottom)
By Timothy Puko
NEW YORK--Natural-gas prices closed at a two-week high as warming weather
forecasts encouraged an end to aggressive selling, analysts said.
Prices for the front-month September contract settled up 6.3 cents, or 1.6%,
to $3.897 a million British thermal units on the New York Mercantile Exchange.
The gains broke gas out of a 17-cent trading range it had stayed in since July
21, with nearly all of the gains Tuesday coming within a few minutes after the
trading floor opened at 9 a.m.
Analysts are saying the move likely confirms an end, or at least a break, in
the steep selloff gas had seen for most of the summer. Prices dropped 21%
between June 12 and July 23, which should have enticed more power generators to
switch from coal to gas, several analysts have said.
The weather has also stabilized. Much of the country is still likely to see
normal or below-normal temperatures for the next two weeks, but forecasts
aren't quite as unseasonably cool as they were in July.
That could be lifting demand or inspiring short-sellers who bet the price
would fall to buy back in and close out those bets, analysts said. Traders will
be looking at Thursday's weekly update on natural gas stockpiles to judge
whether power generators are buying more gas and any other notable impact on
demand, they added.
"I don't see any bullish forecasts out there, but they're less bearish than
what they had been," said Jim Ritterbusch, president of energy-advisory firm
Ritterbusch & Associates. "This is a market that's going up on a lack of
selling than it is on any assertive buying."
Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Md., said
it isn't clear that there is a reason for a weather-related demand increase.
The heat that is coming is isolated in the west and in Texas, he said.
Temperatures will be rising into the 90s in Houston and may break 100 in
Dallas, but they won't be spreading into other populated areas of the southeast
like Atlanta and Tennessee, he said.
"There is a mixed message out there right now so people are picking and
choosing what they want to rely on more," Mr. Rogers said. "It's just shades of
bearishness."
FUTURES SETTLEMENT NET CHANGE
Nymex September $3.897 +6.3c
Nymex October $3.920 +6.1c
Nymex November $3.988 +6.2c
CASH HUB RANGE PREVIOUS DAY
El Paso Perm $3.78-$3.89 $3.755-$3.85
El Paso SJ $3.82-$3.90 $3.76-$3.83
Henry Hub $3.82-$3.88 $3.78-$3.80
Katy $3.85-$3.94 $3.76-$3.84
SoCal $4.09-$4.32 $4.08-$4.325
Tex East M3 $2.50-$2.75 $2.40-$2.825
Transco 65 $3.8975-$3.835 $3.765-$3.82
Transco Z6 $2.64-$2.79 $2.70-$2.95
Waha $3.81-$3.90 $3.77-$3.805
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 05, 2014 15:26 ET (19:26 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
080514 19:26 -- GMT
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