Dow Jones - Natural Gas Prices Tick Higher

DJ Natural Gas Prices Tick Higher



  By Nicole Friedman


  NEW YORK--Natural-gas prices rose Monday ahead of expected hot weather this week.

  Natural-gas futures for August delivery recently rose 3.5 cents, or 1.3%, to $2.811 a million British thermal units.

  Still, analysts say cooler weather in August could limit demand for the fuel. Natural-gas consumption rises in hot
weather as more air-conditioning use increases electricity demand.

  "Summer heat will persist into the weekend," forecaster WSI Corp. said in a note. In the next six to 10 days,
"above-average temperatures are expected across the West, portions of the South and the East Coast."

  Following that, however, WSI Corp. calls for "a shot of unseasonably cool air" to spread across the central and
eastern U.S. in the next 11 to 15 days.

  Goldman Sachs cut its forecasts for natural-gas prices to $2.75/mmBtu in the second half of this year, down from its
prior forecast of $3.30/mmBtu, and to $3/mmBtu next year, down from $3.50/mmBtu.

  "Any rally in the absence of sustained hot summer temperatures will prove unsustainable," the bank said, noting that
natural-gas prices need to stay low to prevent power plants from switching away from natural gas to coal.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.86/mmBtu, compared with Friday's
range of $2.79-$2.86. Cash prices at the Transco Z6 hub in New York last traded at $2.94/mmBtu, compared with Friday's
range of $1.60-$1.85.


  Write to Nicole Friedman at nicole.friedman@wsj.com


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  (END) Dow Jones Newswires

  July 27, 2015 10:30 ET (14:30 GMT)

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

072715 14:30 -- GMT
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