DJ Natural-Gas Futures Climb on Cooler Temperatures
By Christian Berthelsen
Natural-gas prices rose Wednesday as short-term forecasts suddenly turned slightly cooler, raising expectations for
gas-fired heating demand.
Natural gas for October delivery rose 3.8 cents, or 1%, to $4.033 a million British thermal units on the New York
Mercantile Exchange, on pace for a fourth straight session of gains.
Short-term weather forecasts for the next week to 10 days predicted new pockets of cool in the Southwest, Midwest and
Northeast U.S. that could "marginally enhance early season overnight heating demand," Commodity Weather Group said in a
note.
Earlier forecasts had largely predicted neutral conditions in the start to the so-called shoulder season, when mild
temperatures normally hold little demand for either gas-fired heating or cooling.
Repairs on a Transco pipeline in Louisiana were also curtailing supplies, with natural-gas flows unavailable to
several directions for up to 10 days. The repairs, following the shutdown of a pipeline that feeds Gulf of Mexico
production to the Henry Hub delivery point in Louisiana, lent support to futures.
The natural-gas industry is approaching the end of the season during which it replenishes depleted inventories used
during the prior winter, and the market remains fixated on whether there will be enough supply by the start of heating
season this autumn. While inventory levels are expected to fall short of their 3.8 trillion-cubic-feet mark of last
year, they are expected to reach an adequate level of around 3.55 trillion cubic feet, according to research
consultancy Energy Aspects.
As of last week, stockpiles were still 14% below average for this time of year, though several analysts are
predicting a robust string of additions to storage in the weeks ahead to wind down the storage season. The U.S. Energy
Information Administration is scheduled to release its latest update to the data on Thursday.
In the cash market, physical gas for next-day delivery at the benchmark Henry Hub in Louisiana last traded at $4 a
million British thermal units, up from Tuesday's range of $3.8825-$3.94. Physical gas at the Transco Z6 hub in New York
traded in a bid-offer range of $2.45-$2.53, compared with Tuesday's range of $2.45-$2.60.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
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(END) Dow Jones Newswires
September 17, 2014 09:57 ET (13:57 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
091714 13:57 -- GMT
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