Natural Gas Futures Lifted by Hot Weather, Prospect of Tropical Storm in Gulf of Mexico

摘要

Natural gas futures advanced late last week as bona fide summer temperatures hit the East Coast and the increased probability of a tropical storm moving into the Gulf set buyers into high gear. "The [model] tracks on the system have been all over the place, so the gas market has probably priced in about as much risk as they're going to at this point until there's more data showing how it develops and where it's going," said an energy futures trader in Texas. The assembly of thunderstorms percolating in the Caribbean became Tropical Storm Alex late Friday, according to the National Hurricane Center. Some forecasts models then have it moving toward the Gulf of Mexico, where roughly 10% of US domestic gas supply is produced. According to the US Department of Energy, tropical storms and hurricanes this year are expected to reduce gas output by 166 billion cubic feet, which is equal to about three days of overall lower 48 gas production.