DJ Natural Gas Prices Fall From Summer Highs
By Timothy Puko
Natural gas prices tumbled from their summer highs Monday as a warmer afternoon forecast wasn't enough to override
concerns about strong supply.
The front-month August contract fell 4.7 cents, or 1.6%, to $2.823 a million British thermal units on the New York
Mercantile Exchange. After big losses in the morning, gas briefly rallied to unchanged after noon weather updates
showed warmer temperatures on the way, but prices retreated again in the afternoon.
"It's just in a ... standoff," said Michael Doyle, a broker at Eclipse International Inc. in New York. "Until some
fund steps up and puts down a lot of money, the market is just going to tread water."
Gas hasn't traded outside of a 31-cent range in about six weeks. Record consumption from power plants has buoyed
prices, but near-record production and the threat of storage filled near capacity has kept prices from climbing much
above $2.90/mmBtu. It traded around that point for most of last week, and pulled back sharply on Monday.
"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.
To sell off 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, while warmer, still aren't extreme enough to
generate the kind of demand for air conditioning and the gas-fired power that fuels it with supplies as healthy as they
are, analysts said.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
July 20, 2015 14:52 ET (18:52 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
072015 18:52 -- GMT
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