Natural Gas Futures Prices Surge Amid Hot Weather and Tropical Storm Forecast

Strategic Insights -

Hot weather and the approach of a tropical storm pushed natural gas futures prices sharply higher in thin trading yesterday. As temperatures in the Midwest and Northeast are forecasted to climb into the 90's, natural gas prices rose in response to anticipated heavy air-conditioner use. The Commodity Research Bureau's index of 21 commodities also rose, but other energy futures ended mixed.

Key Takeaways:

  • Natural gas for September delivery jumped 6.8 cents to $1.539 for 1,000 cubic feet on the New York Mercantile Exchange.
  • The surge in natural gas prices was driven by hot weather and the approach of a tropical storm called Felix, which poses a threat to natural gas production platforms and pipelines in the Gulf of Mexico.
  • The American Gas Association reported that United States natural gas in storage rose by 38 billion cubic feet last week, a smaller increase than traders expected due to the temporary shutdown of some natural gas production last week because of Hurricane Erin.
  • Other energy futures ended mixed, with light sweet crude oil slipping 1 cent to $17.78 a barrel, September home heating oil falling 0.25 cent to 49.95 cents a gallon, and September unleaded gasoline rising 0.40 cent to 54.78 cents a gallon.
  • The Commodity Research Bureau's index of 21 commodities rose 0.05 point to 232.60.
  • September deliveries of frozen concentrated orange juice plunged 3.5 cents to 97 cents a pound as traders perceived little threat of storm damage to Florida citrus groves.
  • Sugar futures surged and wheat futures fell on the commodity markets elsewhere.

Statistics:

  • Natural gas for September delivery rose 6.8 cents to $1.539 per 1,000 cubic feet.
  • The Commodity Research Bureau's index of 21 commodities rose 0.05 point to 232.60.
  • United States natural gas in storage rose by 38 billion cubic feet last week.
  • September home heating oil fell 0.25 cent to 49.95 cents a gallon.
  • September unleaded gasoline rose 0.40 cent to 54.78 cents a gallon.
  • September deliveries of frozen concentrated orange juice plunged 3.5 cents to 97 cents a pound.

Sources:

  • The article does not provide a specific source for the trade prices, but quotes George Ellis, a trader with GSC Energy in Atlanta.
  • The article cites the American Gas Association for the data on natural gas storage.
  • The Commodity Research Bureau's index is also referenced.