Natural gas futures climbed for a second day in New York as forecasts showed hotter-than-normal U.S. weather that would boost demand for the power-plant fuel after the coolest July in five years.
Temperatures may be higher than average in the central and southern U.S. through Aug. 23, according to MDA Weather Services in Gaithersburg, Maryland. The average July temperature was 73.3 degrees Fahrenheit (23 Celsius) in the contiguous U.S., the lowest since 2009, government data show.
“We have some heat in the Midwest that may seep into the East Coast by the end of the month,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It looks like it’s going to be a brief warm-up, but every little bit counts.”
Natural gas for September delivery rose 10.3 cents, or 2.7%, to $3.895 per million British thermal units at 11:53 a.m. on the New York Mercantile Exchange. Volume for all futures traded was 2.3% above the 100-day average. Prices are up 12% from a year ago.
The high in St. Louis on Aug. 22 may be 95 degrees Fahrenheit (35 Celsius), 8 higher than average, according to AccuWeather Inc. in State College, Pennsylvania. Dallas may reach 100 degrees, 4 more than usual.
Power plants account for 31% of gas demand, according to the U.S. Energy Information Administration. The agency is the Energy Department’s statistical arm.
Gas deliveries to electricity generators surged 21% since June 21 to 28 billion cubic feet yesterday, according to LCI Energy Insight in El Paso, Texas.
Stockpiles of natural gas were 19% below the five-year average on Aug. 8, the biggest deficit for the time of year since at least 2005. EIA data scheduled for release Aug. 21 may show inventories rose 82 billion cubic feet in the week ended Aug. 15, compared with the five-year average gain of 48 billion for the period, according to the median of four analyst estimates compiled by Bloomberg.
U.S. gas consumption may climb 1.7% this year to 72.6 billion cubic feet a day, led by industrial users, the EIA said Aug. 12 in its monthly Short-Term Energy Outlook report. Inventories may total 3.463 trillion cubic feet at the end of October, the lowest start to the peak heating season since 2008.
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