UPDATE 3-U.S. natural gas futures edge up with hot weather forecasts

Tue Jun 18, 2013 4:25pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

* U.S. Northeast, Midwest expect hotter weather
    * Outlook for Texas and the South still fairly mild
    * Coming up: Reuters natgas storage poll on Wednesday

    By Joe Silha
    NEW YORK, June 18 (Reuters) - U.S. natural gas futures ended
higher for a second straight day on Tuesday, driven by forecasts
for hotter weather in the Northeast and Midwest that should
force more homeowners and businesses to crank up their
    Mild late-spring weather pressured front-month gas futures
down nearly 12 percent over the last three weeks, the biggest
three-week slide for the nearby contract in six months.
    But with heat now forecast for northern-tier states later
this week and next week, gas prices are up nearly 5 percent so
far this week, with more gains possible if the forecast holds.
    "I think there was some short covering and continued buying
on the warmer weather outlook for the Northeast," said Gelber &
Associates analyst Aaron Calder.
    Front-month gas futures on the New York Mercantile
Exchange ended up 3 cents, or 0.8 percent, at $3.905 per million
British thermal units after trading between $3.865 and $3.952.
The front month posted a three-month low of $3.71 on Wednesday.
    Calder noted that shorts may be covering after several tests
of support in the low-$3.70s per mmBtu over the last week.
    The U.S. National Hurricane Center said Tropical Depression
Two was expected on Wednesday to move over the Bay of Campeche
in the southwest Gulf of Mexico. Traders do not expect the
system to disrupt any U.S. oil or gas production in the Gulf.
    Separately, a section of the Florida Gas Transmission's
natural gas pipeline in Louisiana was shut after an explosion on
Tuesday. There were no injuries reported, and the incident was
not expected to disrupt shipments to customers. 
    Commodity Weather Group noted that computer models turned a
bit warmer this morning for the Midwest and East in the next six
to 10 days, but the private forecaster still expects mostly
seasonal readings for Texas and the South during the period.
    Many traders remained skeptical of the upside, with
inventories at comfortable levels and production still flowing
at or near a record high.
    While the Baker Hughes gas drilling rig count is
still hovering at 353, just above the 18-year low of 350 posted
five weeks ago, U.S. gas production has not slowed much, if at
all from last year's record high.

    The Energy