Dow Jones - Largest One Day Gain In Nearly Three Weeks

DJ Natural Gas Prices Rise as Weather Warms


   By Timothy Puko


  Natural gas prices made their largest one-day gains in nearly three weeks Tuesday as weather forecasts show a heat
wave settling in over Texas.

  The front-month September contract gained 6.4 cents, or 2.3%, to $2.812 a million British thermal units on the New
York Mercantile Exchange. The boost sent gas back to the middle of the 31-cent trading range it has settled in every
session 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.

  "The Texas heat is going to be a big deal in the coming 1-2 weeks as the hangover of the spring rains is getting
erased," WeatherBELL Analytics LLC said in its midday update.

  That is the big driver that pushed up prices steadily after 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 hotter 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 those bearish traders all exit 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.

FUTURES          SETTLEMENT     NET CHANGE
Nymex September  $2.812         6.4c
Nymex October    $2.841         6.4c
Nymex November   $2.53          5.3c

CASH HUB          RANGE           PREVIOUS SESSION
El Paso Perm       $2.75-$2.785    $2.715-$2.735
El Paso SJ         $2.75-$2.775    $2.7225-$2.74
Henry Hub          $2.795-$2.86    $2.74-$2.775
Katy               $2.79-$2.83     $2.72-$2.78
SoCal              $2.90-$3.00     $2.83-$2.94
Tex East M3        $1.42-$1.50     $1.44-$1.51
Transco 65         $2.7825-$2.82   $2.71-$2.755
Transco Z6         $1.93-$2.05     $2.47-$2.65
Waha               $2.77-$2.77     $2.735-$2.73


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


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  (END) Dow Jones Newswires

  August 04, 2015 15:13 ET (19:13 GMT)

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

080415 19:13 -- GMT
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