DJ Natural Gas Boosted by Early Summer Heat
By Timothy Puko
Natural-gas prices are rising Tuesday morning as traders hone in on warm weather likely to boost demand for gas-fired
power.
Prices for the front-month June contract rose 7.8 cents, or 2.8%, to $2.88 a million British thermal units on the New
York Mercantile Exchange. Prices have rebounded from Monday's drop and are pushing back toward their seven-week highs.
This week's weather forecasts have sparked more optimism than the ones from late last week, Dominick Chirichella,
analyst at the Energy Management Institute, said in a note. Forecasts show warmer-than-normal temperatures settling in
over the entire East Coast and large parts of the Midwest for most of the second half of May, raising expectations that
power plants could burn more gas as customers turn on their air conditioners, analysts said.
"If the actual weather is in sync with the forecasts there could be an early call" on natural gas, Mr. Chirichella
said.
The optimistic demand forecasts comes just as drilling data indicates an oversupply situation may wane, said Matt
Smith, an analyst at consultant Schneider Electric SA in Louisville, Ky. The U.S. Energy Information Administration's
monthly drilling production report from Monday pointed to the potential for falling production in June, which is also
helping to boost prices, Mr. Smith said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.8675/mmBtu, compared with Monday's
range of $2.82-$2.90. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $2.9125/mmBtu to
$3.00/mmBtu, compared with Monday's range of $2.98 to $3.07.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
May 12, 2015 09:39 ET (13:39 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051215 13:39 -- GMT
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