Dow Jones - Natural Gas Prices Rise As Weather Warms

DJ Natural Gas Prices Rise as Weather Warms


   By Timothy Puko


  Natural gas prices are climbing Tuesday as weather forecasts show a heat wave settling in over Texas.

  Natural gas for September delivery rose 6.9 cents, or 2.5%, to $2.817 a million British thermal units on the New York
Mercantile Exchange. Prices are up now two sessions in a row, but they remain firmly locked into the 31-cent trading
range they have been stuck in for nearly two months.

  Consumption of gas-powered electricity often rises in the summer as people turn on their air-conditioning units.
Tuesday's forecasts show temperatures more than five degrees Fahrenheit above normal settling in for the next week in
Texas, one of the country's largest markets for cooling and power. Both Dallas and Houston will make it over 100
degrees Fahrenheit, according to private forecasters.

  Analysts said that is a big driver pushing up prices steadily since electronic trading opened Monday evening. The
market has been dominated by bearish traders who could be forced out in a bunch if some factors, such as warmer
weather, suggest prices could move against them. They have to buy back contracts to close out bearish positions, and
that can bid up prices quickly if many of them all make the same move at once, an event known as a short-covering
rally.

  "The more supportive short term weather forecast is the primary catalyst for the short covering rally in (natural
gas) price so far this week," Dominick Chirichella, analyst at the Energy Management Institute, said in a note.


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


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  (END) Dow Jones Newswires

  August 04, 2015 09:43 ET (13:43 GMT)

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

080415 13:43 -- GMT
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