This Heat Wave Will Haunt U.S. Gas Market Even After It Endsby
Five of 12 analysts and traders see gas prices extending gains
U.S. report showed smallest seasonal supply gain in a decade
U.S. natural gas bulls may reap the benefits of the East Coast heat wave long after it ends.
Five of 12 analysts and traders surveyed by Bloomberg see gas prices advancing while four expect them to remain steady, near four-week highs. The rest were bearish.
Blazing temperatures in the eastern U.S. this month have had people blasting their air conditioners, boosting gas demand from power plants to a record and limiting gains in stockpiles of the fuel. Gas futures jumped the most in two months Thursday after government data showed the smallest injection into storage in a decade for the week ended July 22. Next week’s report may also show a paltry increase, keeping prices elevated.
“The bears are going to get a little nervous with the temperatures still being hot,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “Storage injections through the next couple of weeks will be below average.”
Gas stockpiles have climbed by 826 billion cubic feet since March 25, 28 percent lower than the five-year average for that period, Energy Information Administration data show.
The trend of below-average storage injections that has dominated this season will continue for a while longer, based on forecasts. The midday weather update on Thursday turned warmer for the Great Lakes and the East in the second week of August than previous forecasts showed, said Jim Southard, meteorologist with Frontier Weather Inc. in Tulsa, Oklahoma.
Gas futures climbed 9.6 cents, or 3.5 percent, so far this week to settle Thursday at $2.873 per million British thermal units on the New York Mercantile Exchange. Prices were headed for the biggest one-week gain in four weeks.