DJ Natural Gas Prices Fall From Summer Highs
By Timothy Puko
Natural gas prices Monday are taking their strongest downturn of July, retreating from the high end of their recent
trading range.
Gas traded around $2.90 a million British thermal units for most of last week, hitting its highest points in a month.
But several traders and analysts have said it can't sustain those prices because near-record production is keeping the
market oversupplied.
To selloff a glut, prices have to drop so power plants opt to buy more of it instead of coal. Stockpiles are already
higher than they usually are this time of year. And weather forecasts are also slightly cooler than they were on
Friday, suggesting smaller-than-expected demand for gas-fired power to run air conditioners will help keep supplies
healthy in the weeks to come.
Natural-gas futures for August delivery recently fell 7.2 cents, or 2.5%, to $2.798 a million British thermal units
on the New York Mercantile Exchange. The fall is approaching the biggest one-day losses in nearly two months. It has
also put gas firmly back into the middle of the 31-cent trading range it has been in since June 9.
"There's no reason for this market to go up. And there's certainly a lot of reason for it to stay in this range,"
said John Saucer, vice president of research and analysis at Mobius Risk Group in Houston.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.84/mmBtu, compared with Friday's
range of $2.825-$2.88. Cash prices at the Transco Z6 hub in New York traded at $2.975/mmBtu, compared with Friday's
range of $2.25-$2.70.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
July 20, 2015 09:48 ET (13:48 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
072015 13:48 -- GMT
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