Stalled U.S. Gas Rally to Resume as Supply Glut Erodes With Heatby
The U.S. natural gas rally that has stalled in recent days will get new life as hotter weather helps erode the supply glut.
Seven of the 10 analysts and traders surveyed by Bloomberg expect gas futures to advance. Last week, half of the respondents had predicted that a three-week rally would fizzle.
Gas prices were little changed this week as eastern U.S. temperatures moderated and a government report Thursday showed a bigger-than-forecast supply gain. Yet the storage injection was below average, helping reduce a surplus to the five-year average to 30.1 percent on June 10, the least since February.
“The arrival of summerlike weather has bolstered nat gas cooling-related demand and has resulted in weekly inventory injections underperforming versus history for most of the injection season to date,” Dominick Chirichella, senior partner at the Energy Management Institute in New York, said in a note to clients Thursday.
Natural gas futures for July rose 2.4 cents, or 0.9 percent, so far this week to settle Thursday at $2.58 on the New York Mercantile Exchange. Prices have gained 13 percent in June, heading higher for the fourth straight month.