US GAS: Futures Settle At Fresh 10-Month High
Published: Jun 08, 2011
By Ryan Dezember
Of DOW JONES NEWSWIRES
HOUSTON (Dow Jones)--Natural-gas futures rebounded from an early slide Wednesday and ticked to a new 10-month high.
Natural gas for July delivery settled 1.6 cents, or 0.33%, higher at $4.847 a million British thermal units on the New York Mercantile Exchange. The benchmark contract had fallen by as much as 6.4 cents early but reversed course toward the end of trading.
The July contract has reached fresh 10-month end-of-day highs in each of the past three trading sessions.
That push is part of a rally that has seen the benchmark contract rise 16.5% since May 20 on higher-than-normal temperatures.
"Since May 20, we've probably seen a lot of speculative buying with the start of hurricane season and hot weather in the Northeast," said Fain Shaffer, president of Infinity Trading Group in Medford, Ore.
Still, futures' inability to push past $5/MMBtu despite unseasonably hot weather could portend a plunge similar to that seen after futures failed to top $5 during atypically frigid winter days, Shaffer said.
"If the weather moderates I think we could see the futures pull back to $4.50/MMbtu over the short term," he said.
Private forecasters Commodity Weather Group said that higher-than-normal temperatures should remain over swaths of the country, including the Midwest and Texas, through June 22, but the heat probably won't be as intense as it has been in recent days.
"Both the Midwest and East are at or approaching their peak levels of heat today, so that the national cooling demand level should be at its zenith for this current event," the Bethesda, Md., meteorologists said.
Unable to cross the $5-threshold but supported by balmy weather, prices have hovered in their current range as traders await the Energy Information Administration's gas-storage report on Thursday to gauge the heat's impact on demand for gas-fueled air conditioning.
"The last couple of weeks we've seen real volatility in the number that's come out," said Matt Smith, an analyst with Summit Energy in Louisville, Ky. "It's been way off expectations and I think people have just been holding steady ahead of that."
Analysts and traders surveyed by Dow Jones said they expect the EIA to report that gas inventories rose by 77 billion cubic feet during the week ended June 3--well below the last year's 98-bcf injection and the five-year-average build of 96 bcf.
The EIA is scheduled to release its storage data at 10:30 a.m. EDT.
FUTURES SETTLEMENT NET CHANGE
Nymex July $4.847 +1.6c
Nymex August $4.874 +1.6c
Nymex September $4.893 +1.6c
CASH HUB RANGE PREVIOUS DAY
Henry Hub $4.81-$4.91 $4.78-$4.85
Transco 65 $4.8275-$4.86 $4.83-$4.8575
Tex East M3 $5.55-$5.7725 $5.30-$5.60
Transco Z6 $6.50-$9.00 $5.69-$7.08
SoCal $4.67-$4.76 $4.67-$4.78
El Paso Perm $4.59-$4.63 $4.60-$4.65
El Paso SJ $4.52-$4.55 $4.55-$4.58
Waha $4.66-$4.70 $4.69-$4.725
Katy $4.74-$4.81 $4.73-$4.80
-By Ryan Dezember, Dow Jones Newswires
