Dow Jones - Natural Gas Falls Despite Colder Forecast

DJ Natural Gas Falls Despite Colder Forecast


   By Nicole Friedman


  NEW YORK--Natural-gas prices slid Monday on continued concerns about oversupply.

  Warmer-than-average temperatures in recent months have cut demand for indoor heating in homes and offices, helping
push the natural-gas market into oversupply. About half of U.S. households use natural gas as their primary heating
fuel.

  As of Dec. 25, natural-gas inventories stood 14% above the five-year average level for this time of year.

  Forecasts for the next two weeks call for colder weather in the central U.S., according to WSI Corp. "With colder
weather on tap for the next few days, the market looks to remain a bit on the firmer side," said Frank Clements,
co-owner of Meridian Energy Brokers Inc., in a note.

  But the forecasts aren't cold enough to spark a price rally, analysts say. "Risks of new price dips remain
significant, in our view," said Seaport Global Securities LLC in a note.

  Raymond James analysts lowered their natural-gas price forecast for 2016 to $2 a thousand cubic feet, down from their
prior forecast of $2.35/mcf. This is the bank's third forecast cut since August.

  "The U.S. gas market has been structurally oversupplied for years. We expect the glut to persist in 2016," the bank
said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.375/mmBtu, compared with
Thursday's range of $2.285-$2.35. Cash prices at the Transco Z6 hub in New York last traded at $7.52/mmBtu, compared
with Thursday's range of $2.90-$3.20.


  Write to Nicole Friedman at nicole.friedman@wsj.com


  (END) Dow Jones Newswires

  January 04, 2016 10:47 ET (15:47 GMT)

  Copyright (c) 2016 Dow Jones & Company, Inc.

010416 15:47 -- GMT
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