DJ Natural Gas Pulls Back From Recent Gains
By Christian Berthelsen
Natural gas prices fell Monday as investors closed out bets and scooped up profits from a market that has surged in
recent weeks on what analysts attributed to technically driven trading strategies.
Natural gas futures had climbed more than 15% from recent lows in late April, including a 5.3% gain on Friday, in
moves analysts and investors said had little to do with supply and demand fundamentals.
Analysts said some of the gains have come as traders with bearish bets against the market have closed out those bets,
buying futures to cover their positions and sparking prices higher. Regulatory data shows hedge funds and other money
managers have been backing away from bearish bets.
The front-month June natural gas contract was down 3.1 cents, or 1.1%, at $2.8490 a million British thermal units on
the New York Mercantile Exchange.
"It's too high right now," said Kyle Cooper, managing partner of research consultancy IAF Advisors in Houston, noting
inventories are expected to ramp up in the coming weeks. "We're going to have a lot of gas in November."
Natural gas inventories grew by 76 billion cubic feet last week, bringing stockpiles 71% above depleted year-ago
levels and just 3.6% below average for this time of year. Some analysts expect the market could be in for a series of
triple-digit increases in the coming weeks.
Still, natural gas consumption could be strong, with above-normal temperatures forecast over the eastern U.S. into
late May that could drive gas-fired cooling demand.
In the physical market, cash prices for next-day delivery of gas at the benchmark Henry Hub in Louisiana last traded
at $2.83 a million British thermal units, within Friday's range of $2.73-$2.85. Prices at the Transco Z6 hub in New
York traded in a bid-offer range of $2.85-$3.10, above Friday's range of $2.80-$2.87.
Write to Christian Berthelsen at Christian.Berthelsen@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
May 11, 2015 09:28 ET (13:28 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
051115 13:28 -- GMT
------
No comments:
Post a Comment