DJ Natural Gas Supply and Cool Weather Keep Lid on Prices
By Timothy Puko
Natural gas prices slid to a one-month low Tuesday, as cooler weather forecasts and stubbornly high supply keep
weighing on prices.
Futures for September delivery settled down 2.4 cents, or 0.9%, to $2.7040 a million British thermal units on the New
York Mercantile Exchange. It is the lowest settlement since July 8 and puts gas near the bottom of a 25-cent range it
has settled within every session for more than two months.
Summer prices are closely tied to weather because consumption usually rises as people turn on their air-conditioning
units and ramp up demand for gas-powered electricity. Tuesday morning's forecasts show a retreat of some above-normal
temperatures that had been predicted for the East Coast next week. Instead, a larger-than-expected patch of
below-normal temperatures could cap gas demand next week from Nebraska to Ohio, private forecasts show.
Though demand is likely to be static or start a decline, few expect production to follow. It has plateaued at around
73 billion cubic feet to 74 billion cubic feet a day, with efficiency gains, new pipelines, growing production in the
Gulf of Mexico and an uptick in oil drilling that could also produce gas all conspiring to keep production strong,
Energy Aspects, a research consultancy, said in a note.
"A sharp downturn in production is off the cards," it said.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
August 18, 2015 15:32 ET (19:32 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
081815 19:32 -- GMT
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