Natural gas futures rose from a six-month low in New York as forecasts for a surge of heat signaled increased demand for the fuel to power air conditioners.
“Short-lived, but potentially potent” heat will sweep most of the lower 48 states July 21 through July 25, MDA Weather Services said today. Gas stockpiles last week probably rose by more than the five-year average for the 13th consecutive week, analyst estimates show.
“It does look like there is plenty of heat in the forecast, for Texas especially and parts of the Midwest, so that will surely affect demand for gas,” said Ellen Stamm, global natural gas analyst at Schneider Electric in Louisville, Kentucky. “In the depths of summer, when the cooling demand is so intense and production is not increasing quite as fast as it was before, there’s less gas to be put into storage.”
Natural gas for August delivery rose 2.6 cents, or 0.6 percent, to $4.123 per million British thermal units at 9:19 a.m. on the New York Mercantile Exchange. Volume for all futures traded was 41 percent below the 100-day average. Prices yesterday fell to $4.097, the lowest settlement since Jan. 10. The futures are down 2.5 percent this year.