DJ Natural Gas Gets Boost From Warmer Weather Forecasts
By Timothy Puko
Natural gas prices rose Tuesday as warmer weather forecasts suggest stronger-than-expected demand starting next week.
The front-month September contract settled up 3.5 cents, or 1.3%, to $2.685 a million British thermal units on the
New York Mercantile Exchange. Gas is hovering at the bottom of a 23-cent range it has settled in every day since early
June.
Consumption of gas-powered electricity often rises in the summer as people turn on their air-conditioning units.
Though not all forecasts include as extreme a change, MDA Weather Services in Maryland is showing large swaths of the
Midwest and Northeast with temperatures up to 8-degrees-Fahernheit-above normal for next week, up from Monday's
forecast showing a top of 5-degrees-above normal.
"That's giving the market a little bit of a boost here and keeping it from breaking down under $2.60," said Frank
Clements, co-owner of Meridian Energy Brokers Inc. "It's a shorter-term thing."
Strong supply will still keep prices in check and trouble investors over the longer term, Mr. Clements and analysts
said.
Simmons & Co. International said Tuesday that stockpiles are still likely to enter the winter at their second-highest
point ever and that production will keep growing, by 2% for 2016. Its price forecast for 2016 is the same as for 2015,
a bearish prediction of benchmark prices averaging between $2.75/mmBtu and $3.00/mmBtu.
"While the rate of gas production growth should slow meaningfully next year ... abundant supply appears positioned to
comfortably meet growing demand," Simmons said in a note.
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
August 25, 2015 15:35 ET (19:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
082515 19:35 -- GMT
------
No comments:
Post a Comment