Dow Jones - Natural Gas Climbs As Production Falls

DJ Natural Gas Climbs as Production Falls

  By Timothy Puko

  Natural gas futures are climbing Tuesday as production appears to be falling and weather forecasts show a relent of a
cool spell forecasted to start the summer.

  Natural gas for July delivery gained 4.7 cents, or 1.7%, to $2.78 a million British thermal units on the New York
Mercantile Exchange. The gains keep gas locked in the middle of the 55-cent trading range it has ricocheted within for
more than seven weeks.

  The amount of gas flowing through pipelines early Tuesday suggested production was down 2% from a surge over the
weekend, according to data provider PointLogic Energy. The fall comes from the Northeast, the Gulf Coast and the
Rockies, which hold some of the country's largest gas fields.

  "It's the only explanation I see" for rising prices, said Scott Gettleman, an independent trader in New York.

  The market may also be getting a boost from weather forecasts, which are showing warmer temperatures that signal
stronger demand coming in July, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting
firm. Hot weather can cause people to turn on their air conditioners, ramping up demand for gas-fired power.

  Forecasts do still show significantly-below-average temperatures on the way in the Midwest and East Coast through to
July 2, which damped optimism about demand and sent prices down to start the week. But forecasts are now showing
above-normal temperatures headed for populous East Coast markets starting around Independence Day, reversing some of
that trend, analysts said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.835/mmBtu, compared with Monday's
range of $2.755-$2.83. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $2.87/mmBtu to
$2.90/mmBtu, compared with Monday's range of $2.93 to $3.08.

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

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  (END) Dow Jones Newswires

  June 23, 2015 09:41 ET (13:41 GMT)

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

062315 13:41 -- GMT
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