June 17 (Bloomberg) -- Natural gas futures climbed for the first time this week on forecasts of above-normal temperatures that may boost demand for the power-plant fuel.
Gas rose as much as 0.8 percent after forecasters including Matt Rogers at Commodity Weather Group LLC in Bethesda, Maryland, predicted hotter-than-normal weather for the U.S. East Coast from June 22 to June 26. The heat will concentrate on the Northeast and eastern Canada from June 27 to July 1, Rogers said in a note to clients today.
“We’re having some warm weather, and the market is seeing a bit of a retracement after yesterday’s big sell-off,” said Tom Saal, senior vice president of energy trading at INTL Hencorp Futures LC in Miami. “We could get back to the $4.60 area.”
Natural gas for July delivery rose 2.6 cents, or 0.6 percent, to $4.438 per million British thermal units at 9:39 a.m. on the New York Mercantile Exchange. The futures have gained 0.8 percent this year.
Prices declined 3.6 percent yesterday, the most in six weeks, on speculation that U.S. supplies are adequate to meet summer demand from power plants.
Hot weather may increase air conditioner use in the next two weeks. The high temperature in New York on June 22 may be 86 degrees Fahrenheit (30 Celsius), 5 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Atlanta may be 94, 7 above normal.
Cooling demand in the U.S. may be 10 percent above normal from June 23 through June 27, David Salmon, a meteorologist at Weather Derivatives in Belton, Missouri, said in a note to clients today.
Power plants use about 30 percent of the nation’s gas supplies, according to the Energy Department.
Natural-gas prices may rise as high as $7.50 per million British thermal units before the end of August if higher-than- normal temperatures in the U.S. boosts energy demand, said John Snell, a managing director at Risk Management Inc, in an interview yesterday at the INTL FCStone Outlook Conference in Chicago.
The Energy Department said yesterday that stockpiles rose 69 billion cubic feet in the week ended June 10 to 2.256 trillion, matching estimates made by analysts before the report was released. The five-year average storage change for the week is an increase of 87 billion cubic feet, department data showed.
--With assistance from Elizabeth Campbell in Chicago. Editors: Bill Banker, Dan Stets
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