Dow Jones - Natural Gas Rising On Warm Weather Forecasts

DJ Natural Gas Rising on Warm Weather Forecasts


   By Timothy Puko


  Natural gas prices are rising slightly Friday, rebounding from news of oversupply after weather forecasts suggested
strong demand in the coming weeks.

  Natural gas for August delivery rose 0.7 cent, or 0.3%, at $2.861 a million British thermal units on the New York
Mercantile Exchange. The boost keeps gas near the top of a 31-cent range it has traded within for more than a month.

  Demand for gas rises as summer heat gets people to turn on air conditioners and consume more gas-fired power. Recent
forecasts are predicting above-normal temperatures spreading in the next two weeks across large parts of the country,
especially concentrated in the Southeast.

  Commodity Weather Group LLC made one of the biggest adjustments Friday, though it also warned clients that hot
forecasts last week didn't materialize. It added above-normal temperatures up through the Mid-Atlantic region and the
Northern Plains this week, and up into the Midwest for next week.

  Heat-related demand "should serve as a floor in market as new sellers may stay on the sidelines as the weather plays
out over the next few weeks," Dominick Chirichella, analyst at the Energy Management Institute, said in a note.

  The gas market does appear to be oversupplied by about 1 billion cubic feet a day, or about 1%, after the
government's weekly storage update Thursday showed inventories rose by 99 bcf, according to Tudor, Pickering, Holt &
Co., a Houston investment bank, in a note. Prices initially fell on that news, but power-sector demand has repeatedly
lifted prices this year. The sector is still consuming about 5 bcf a day more than it was a year ago now that several
coal-fired plants have closed, Tudor, Pickering said.

  "The next 8 weeks represent peak of summer demand and will be watched closely to tease out impact of the coal
retirements earlier this year," the bank added.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.85/mmBtu, compared with Thursday's
range of $2.88-$2.9225. Cash prices at the Transco in New York last traded at $2.625/mmBtu, compared with Thursday's
range of $1.38 to $1.60.


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


Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>

  (END) Dow Jones Newswires

  July 17, 2015 09:45 ET (13:45 GMT)

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

071715 13:45 -- GMT
------