Dow Jones - Natural Gas Boosted by Hot, Stormy Weather

DJ Natural Gas Boosted by Hot, Stormy Weather


   By Timothy Puko


  Natural gas is surging Monday, as hot, stormy weather shows signs of bringing an oversupplied market closer to
balanced.

  Prices for the front-month July contract rose 8.4 cents, or 3.1%, to $2.834 a million British thermal units on the
New York Mercantile Exchange. Monday's gains are large enough so far to cancel out losses from Friday.

  Weather updates after the weekend are showing hot temperatures holding on deep into June, increasing the possibility
that power plants will burn more gas to fuel air conditioners in large parts of the country. Forecasts are also showing
a tropical storm headed for the Gulf Coast, which in the past has been a threat to disrupt gas supplies in the region,
a hub for the industry.

  Some analysts and meteorologists are quick to suggest that these factors are unlikely to make a big impact on the
supply or demand for gas. Storms in the Gulf Coast aren't nearly as big a threat to supplies as they used to be now
that shale drilling has moved the most critical supplies of gas north and on shore. And hot weather in the late spring
doesn't get hot enough to cause a major spike in demand for cooling and gas-fired power.

  But traders are jumpy at this time of year when the possibility of a long, hot summer still lies ahead, analysts have
said. It puts an added emphasis on the short-term weather forecasts, said Jim Ritterbusch, president of energy-advisory
firm Ritterbusch & Associates.

  The chance of a tropical storm right now "doesn't look like a big deal, but whenever you've got any storm movement
down in that area, you're going to kick a little storm premium into the market," raising prices, Mr. Ritterbusch said.

  Many traders have also been expecting the weather phenomenon known as El Nino to bring cool weather and soft demand
for gas-fired power this summer, said Matt Rogers of Commodity Weather Group LLC in Bethesda, Md. But now that that
hasn't started yet, traders are rethinking their bets because June is on track to be one of the hottest in the last 15
years, he said.

  "The longer that (holds), the more folks are going to start thinking maybe this will be a hot summer afterwards," Mr.
Rogers said. "We don't believe that, but I certainly understand the mindset."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.88/mmBtu, compared with Friday's
range of $2.735-$2.8475. Cash prices at the Transco Z6 hub in New York last traded at $3.00/mmBtu, compared with
Friday's range of $2.64 to $2.97.


  Write to Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  June 15, 2015 09:40 ET (13:40 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

061515 13:40 -- GMT
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