DJ Natural-Gas Rally Ends as Demand Expectations Soften
By Timothy Puko
NEW YORK--The natural-gas market's four-day rally ended Tuesday as weakening demand expectations encouraged traders
to pull back.
The front-month November contract settled down 3.3 cents, or 0.8%, at $4.121 a million British thermal units on the
New York Mercantile Exchange. Trading stayed within an 8-cent range and the contract drifted lower after setting a new
two-month intraday high of $4.178/mmBtu.
Prices pulled back slightly after weather forecasts showed warmer expectations than they had the day before. Cold
weather should boost demand for home heating, and fears of an early or severe winter have recently made traders jump.
Tuesday they balked at how high prices got. Some thought the market was inflated by technical trading in the face of
record production.
"There's a lot of new supply hitting the market and not a lot of demand," Aaron Calder, senior market analyst at
energy-consulting firm Gelber & Associates in Houston, said in a note. "At these prices, power generators do not want
to use natural gas, and the new supply is free to be placed into storage."
Fear over momentum did prevent larger losses, though, traders said. Prices pushed up through several resistance
levels that may have made technical traders hesitate to buy, and that made some bears cautious, keeping trading
relatively tight.
"I still think we're going lower...but you can't get in the way right now," said Scott Gettleman, an independent
trader in New York.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
September 30, 2014 16:05 ET (20:05 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
093014 20:05 -- GMT
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