Dow Jones - Natural Gas Rises On Technical Trading

DJ Natural Gas Rises on Technical Trading


   By Timothy Puko


  Natural gas is rising and could end a seven-session losing streak likely from profit-taking, a broker and trader
said.

  Money managers have been heavily positioned in favor of falling gas prices in recent weeks. Traders often close
positions out going into a weekend, and if many bearish traders are closing out and taking profits at once, they have
to buy back contracts to do it and can bid up prices in the process.

  Futures for January delivery recently traded up 3.9 cents, or 2.2%, at $2.794 million British thermal units on the
New York Mercantile Exchange. Prices had fallen earlier in the session--in line with their recent bear-market
trend--but started to rebound around 8 a.m., shortly before the traditional start of U.S. trading.

  A historically strong El Nino weather phenomenon has sharply limited demand for the heating fuel this year just as
rampant production had pushed stockpiles to an all-time high. Forecasts have predicted temperatures hitting 70 degrees
Fahrenheit in New York on Christmas Eve, a crippling blow to a market reliant on winter heating to drive demand.

  Analysts and brokers said Friday that is unlikely to change. Weather forecasts are still warm and production is still
high, and next week there is a chance stockpiles could actually grow, unheard of for December, said Matt Smith,
director of commodity research at ClipperData.

  "This is not the start of an uptrend," said Scott Gettleman, an independent trader in New York.

  It is, however, a time that bearish traders may want to consider closing out those bets, said Frank Clements,
co-owner of Meridian Energy Brokers Inc. outside New York. For traders who take positions based on chart trends, there
are signs in recent price moves that the market could be at or near a bottom, he said. Similar signs haven't been as
reliable in recent weeks as gas has tumbled 25% in a month, but bearish traders who have sold the contract may want to
take this time to buy back in, close out and take their profits just as a precaution, he added.

  "I don't think there is a fundamental shift, but the market is way overdue for a bounce," Mr. Clements said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $1.70/mmBtu, compared with Thursday's
range of $1.74-$1.7525. Cash prices at the Transco Z6 hub in New York last traded at $1.77/mmBtu, compared with
Thursday's range of $1.71-$1.77.


  Write to Timothy Puko at tim.puko@wsj.com


  (END) Dow Jones Newswires

  December 18, 2015 11:06 ET (16:06 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

121815 16:06 -- GMT
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