DJ Natural Gas Rebounds on Cold Weather Forecasts and Profit-Taking
By Timothy Puko
Natural-gas futures were bouncing back from big losses, as forecasts of colder weather for the beginning of February
and lower prices have encouraged buyers.
Natural gas for February delivery was up 9.8 cents, or 3.5%, at $2.929 a million British thermal units on the New
York Mercantile Exchange. Gains would break a three-session losing streak that culminated with 9.5% losses on Tuesday
alone, the biggest one-day percentage loss since February.
Weather forecasts had flipped from colder-than-normal to warmer-than-normal over the weekend, leading to Tuesday's
retreat, but those forecasts have partially reversed again. Mixed weather forecasts are growing colder in the east for
the last week of January and the start of February.
Half of U.S. homes use natural gas for heat, making winter cold typically the biggest driver for demand. Well-above
normal temperatures had been forecast to linger in the big heating markets of the Midwest, but are now likely to stay
confined west of the Rockies after Jan. 31, according to Weather Services International. It predicts temperatures 5- to
15-degrees-Fahrenheit-colder than normal to stretch from the middle of the country to the Northeast in the first week
of February.
"Today's pop up shows how sensitive the market still is to any change in weather reports and the choppiness looks
like it will continue for the time being," said Frank Clements, co-owner of Meridian Energy Brokers Inc.
Tuesday's drop gave money managers who had bet on falling prices a chance to buy back in and cash out those bets, Mr.
Clements said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.93/mmBtu, compared with Tuesday's
range of $2.87-$2.95. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $3.15/mmBtu to
$3.50/mmBtu, compared with Tuesday's range of $3.23 to $3.50.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
January 21, 2015 09:53 ET (14:53 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
012115 14:53 -- GMT
------
No comments:
Post a Comment