Bullish natural gas traders are getting a boost as forecasts show oppressive heat in the central U.S. spreading to the East Coast.
Temperatures may be above normal across most of the contiguous U.S. next week, with much of the hot weather concentrated in the Mid-Atlantic, MDA Weather Services said. The high in New York may reach 94 degrees Fahrenheit (34 degrees Celsius) on July 24, 10 degrees above normal, according to AccuWeather Inc.
Gas rebounded in spring and early summer, reaching a 13-month high near $3 per million British thermal units July 1 before cooler weather curtailed demand for the power-plant fuel. While gas stockpiles are at a surplus to normal levels, intense heat has helped to erode the glut.
“We’re dealing with another heat event in the middle of the country in particular,” said John Kilduff, partner at Again Capital LLC in New York. “That heat pattern will slowly shift eastward and I think that’s giving prices some support. It will definitely get air conditioners whirring.”
Futures for August delivery rose 0.6 cent to settle at $2.728 per million British thermal units on the New York Mercantile Exchange. Prices are down 6.7 percent so far this month.