Natural gas futures rose to a one-month high as a surge of heat in Texas and the southern states boosted demand from power generators to run air conditioners.
Temperatures will be above normal in the South and parts of the Midwest over the next five days before heat sweeps across most of the East Coast next week, said MDA Weather Services. The high in Dallas on July 19 will be 100 degrees Fahrenheit (38 Celsius), 4 above normal, and readings will stay there or higher for the next three days, AccuWeather Inc.’s website showed.
“The forecast has temperatures in high gas-consuming regions, basically Texas, the Midwest and the Northeast, showing signs of going above average,” said Santiago Diaz, energy trading associate at FCStone Latin America LLC in Miami. “More than likely there is some short covering by someone who is caught off guard. So they are trying to scramble and cover their shorts. That adds to the buying pressure.”
Natural gas for August delivery rose 1.7 cents, or 0.6 percent, to $2.881 per million British thermal units at 9:44 a.m. on the New York Mercantile Exchange after rising to $2.934, the highest intraday price since June 17. Volume for all futures traded was 64 percent above the 100-day average.