DJ US GAS: Futures End Higher On Weather, Hurricane Outlooks
June 07, 2010
DJ US GAS: Futures End Higher On Weather, Hurricane Outlooks
(Adds settlement and spot price table.)
By Jason Womack
Of DOW JONES NEWSWIRES
HOUSTON (Dow Jones)--Natural gas futures finished higher Monday, lifted by
forecasts for hot weather and a busy hurricane season.
Natural gas for July delivery on the New York Mercantile Exchange settled
11.9 cents, or 2.48%, higher at $4.916 a million British thermal units, the
highest settlement price since Feb. 19. Prices had reached a high of
$4.937/MMBtu in earlier trading.
Natural gas futures were boosted by predictions for hot weather that is
expected to spur additional demand for natural gas-fired power to cool homes
and businesses. Meteorologists are also expecting an active hurricane season,
which has the potential to disrupt supplies from the U.S. Gulf of Mexico, a
region that accounts for about 11% of domestic output. The forecasts were
prompting traders, who had bet heavily on falling prices to buy back previously
sold contracts.
"Nobody wants to be short before the summer," said Kyle Cooper, director of
research for Houston-based IAF Advisors, noting that the forecasts are the
"driving force" behind the gain in prices.
The National Weather Service forecast for June 12 to June 16 predicts
above-normal temperatures across the Northeast, the Midwest, the Mid-Atlantic
and the Southeast.
Jim Rouiller, senior energy meteorologist with the private forecasting firm
Planalytics, wrote in a note to clients on Monday that, by week's end, heat
will begin moving into parts of the Midwest and Northeast and last into early
next week.
The Mid-Atlantic and the Northeast will experience a "return to uncomfortable
heat and humidity levels late this week," Rouiller wrote in a note to clients.
Forecasters are also predicting a busy 2010 Atlantic hurricane season. While
the National Weather Service is not seeing any current tropical storm activity,
the prospect of those storms was prompting some buying.
"We are continuing to work to price in an active hurricane season," said Tim
Evans, an analyst with Citi Futures Perspective in New York.
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