DJ Natural Gas Gains on Hot Weather
By Nicole Friedman
NEW YORK--Natural-gas prices rose Tuesday on expectations that late-summer heat would boost air-conditioning demand.
Hot weather boosts demand for natural-gas-powered electricity as more households and offices turn on
air-conditioning. Natural-gas consumption typically wanes after summer heat subsides and doesn't pick up again until
cold weather spurs consumers to turn up their heat.
Forecasts for the next six to 10 days call for more hot weather in California and the Midwest than previously
expected, according to Commodity Weather Group LLC.
Natural-gas futures recently rose 5.9 cents, or 2.2%, to $2.714 a million British thermal units on the New York
Mercantile Exchange.
"Continued extremely hot early September weather in the Northeast and Midwest...are likely to provide modest support
to natural gas during the first couple of days of trading this week," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note. "By mid-week, however, temperatures should start to moderate rapidly."
Capital Economics cut its natural-gas-price forecasts to $3.50/mmBtu at the end of this year and $4/mmBtu at the end
of next year, down from its previous estimates of $4/mmBtu at the end of 2015 and $5/mmBtu at the end of 2016. Thomas
Pugh, commodities economist at Capital Economics, said in a note that robust production and mild weather kept prices
lower than expected this year.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.755/mmBtu, compared with Friday's
range of $2.65-$2.70. Cash prices at the Transco Z6 hub in New York last traded at $2.84/mmBtu, compared with Friday's
range of $1.60-$2.00.
Write to Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
September 08, 2015 10:43 ET (14:43 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
090815 14:43 -- GMT
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