Dow Jones - Natural Gas Gets Boost From Warmer Weather Forecasts

DJ Natural Gas Gets Boost from Warmer Weather Forecasts



  By Timothy Puko


  Natural gas prices were rising on Tuesday as warmer weather forecasts suggest stronger-than-expected demand starting
next week.

  Natural gas for September delivery gained 2.6 cents, or 1%, to $2.676 a million British thermal units on the New York
Mercantile Exchange. Prices are hovering near the bottom of a 33-cent range they have traded in for two months.

  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.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.70/mmBtu, compared with Monday's
range of $2.62-$2.67. Cash prices at the Transco Z6 hub in New York last traded at $2.5475/mmBtu, compared with
Monday's range of $2.47 to $2.60.


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


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  (END) Dow Jones Newswires

  August 25, 2015 10:13 ET (14:13 GMT)

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

082515 14:13 -- GMT
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