DJ Natural Gas Retreat Continues as Weather Forecasts Warm
By Timothy Puko
NEW YORK--Natural gas prices are falling for a third straight session as weather forecasts for late November and
early December suggest unseasonably weak demand for gas heating.
Natural gas for December delivery is down 3 cents, or 0.7%, at $4.121 a million British thermal units on the New York
Mercantile Exchange. The front-month contract has now declined 8.4% since Thursday's close.
Options on the December contract expired Monday, and the December futures contract settles Tuesday. Most trading
volume has moved to the January contract, which is down 4.6 cents, or 1.1%, at $4.258/mmBtu.
Temperatures as much as 5 to 8 degrees Fahrenheit above normal are likely to extend farther north than expected
yesterday, reaching big markets including Washington, Philadelphia and New York, according to Commodity Weather Group.
Half of all U.S. homes use natural gas for home heating, and above-normal temperatures in December are likely to lead
to unseasonably low demand.
Prices might have dropped even lower, but the large demand from last week, the contract expiration and Thanksgiving
are tempering any selloff, said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York.
Traders often don't like to open trades before the market closes for an extended period or before the Energy
Information Administration gives its weekly update on storage levels. EIA is moving up that update to noon Wednesday,
nearly 24 hours earlier than normal because of the holiday.
"You're going to get some choppy movements today," Mr. Clements said. "Nothing is going to be smooth. A lot of people
are going to be sitting on their hands before the holiday."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.155/mmBtu, compared with Monday's
range of $4.04-$4.13. Cash prices at the Transco Z6 hub in New York last traded at $4.10/mmBtu, compared with Monday's
range of $3.28 to $3.45.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
November 25, 2014 09:46 ET (14:46 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112514 14:46 -- GMT
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