DJ Natural Gas Prices Retreat on Mild Weather
By Timothy Puko
Natural gas prices dropped to a five-month low on Wednesday, as forecasts for a mild start of autumn softened
expectations for demand and pushed gas to its worst quarter of the year.
Prices for the front-month November contract fell 6.2 cents, or 2.4%, to $2.524 a million British thermal units on
the New York Mercantile Exchange. It was the lowest settlement since April 28.
That was also its largest one-day loss in two weeks. Natural gas has now fallen in four of the past five quarters,
losing 30.8 cents per mmBtu, or 11%, since June 30.
Production has only decreased incrementally from its record pace, and that oversupply is suffocating prices as
autumn arrives, said Frank Clements, co-owner of Meridian Energy Brokers Inc.
A Wall Street Journal survey shows analysts and traders expect federal data coming Thursday will show the largest
weekly surplus of natural gas since early June, putting stockpiles 4.6% above their five-year average level for this
week of the year. "There's nothing to keep this market from going lower," Mr. Clements said.
Weather forecasts suggest above-normal temperatures for large parts of the country in the first two weeks of
October. It is a reversal from earlier this week when they showed much larger patches of below-normal temperatures
settling in.
That weather is likely to soften energy consumption, analysts said. Natural gas is largely dependent on weather
cold enough to spur demand for gas-fired heating or hot enough to require air conditioning from gas-powered electricity
plants.
"The current forecasts are not likely to result in a major call on [natural gas] for either heating or cooling
related demand," Dominick Chirichella, analyst at the Energy Management Institute, said in a note.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
September 30, 2015 15:52 ET (19:52 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
093015 19:52 -- GMT
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