US GAS: Futures Rise On Hurricane Forecasts, Economic Data

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NEW YORK (Dow Jones)--Natural gas futures rose Friday, as traders looked ahead to a stronger-than-normal U.S. hurricane season and on signs of continued improvement in the U.S. economy.

Natural gas for June delivery on the New York Mercantile Exchange rose 8.5 cents, or 2% higher, at $4.397 a million British thermal units after opening 1.3 cents higher at $4.325/MMBtu.

"There a lot of indications that it will be an above normal year for hurricanes, and above last year," said Travis Hartman, a meteorologist at EarthSat in Rockville, Md. He said warm temperatures in the Atlantic combined with other factors "all point to more storms." The hurricane season begins next month.

Aaron Studwell, a meteorologist of WeatherInsight in Houston, forecast between 14 and 16 named hurricanes this year, though he said other analysts are predicting as many as 18. The average number of hurricanes is 10.

"We usually try to price in some kind of a premium at least at the beginning of the [hurricane] season and I think that's happening," said Phil Flynn, an analyst with PFGBest in Chicago.

Natural gas prices were also boosted by economic data Monday morning that showed a continued improvement in the U.S. economy. The New York Federal Reserve Bank's May Manufacturing index showed a continued improvement in business conditions this month, though a slower pace than in April.

Despite coming in lower than expected, the data spurred a run of short-covering in natural gas futures Monday morning, traders said, as traders retreated from bets that gas prices would fall.

The amount of bets against natural gas is still high, traders said, because futures are near the top end of a range between roughly $4.40/MMBtu and $3.80/MMBtu in place since March. Bets against gas have tended to rise as it approaches the top end of that range.

Gas supplies remain abundant. Total gas in U.S. storage as of May 7 was 2.089 trillion cubic feet, about 18.4% above the five-year average and 4.9% above last year's level for the same week.


-By Edward Welsch, Dow Jones Newswires; 613-237-0669; edward.welsch@dowjones.com




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