Dow Jones - Natural Gas Falls On Weather Outlook

DJ Natural Gas Falls on Weather Outlook



  By Nicole Friedman


  NEW YORK--Natural-gas futures slipped Monday on expectations that above-average temperatures would weigh on demand.

  Moderate weather has decreased demand for natural gas as an indoor-heating fuel this winter, pushing the market into
oversupply and pushing prices lower. Prices rose last week ahead of a large snowstorm on the East Coast, but forecasts
released Monday call for warmer-than-average temperatures to return in the next two weeks.

  "Temperatures will be broadly warmer than normal for [the next six to 10 days] from the Plains to the East Coast,
including readings of more than 10[degrees]F above normal on average in parts of the Midwest," MDA Weather Services
said in a note Monday.

  Futures for February delivery recently traded down 4.8 cents, or 2.4%, at $2.091 a million British thermal units on
the New York Mercantile Exchange.

  Bank of America Merrill Lynch on Friday cut its natural-gas average price forecast for 2016 to $2.60/mmBtu from its
prior forecast of $3/mmBtu. For 2017, the bank cuts its forecast from $3.50 to $3.20.

  "Choppy and changing weather forecasts across the country continue to be the overriding theme for this winter," the
bank said. "Very mild weather, potentially weakening further our forward balances, cannot be ruled out before the end
of the winter."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.14/mmBtu, compared with Friday's
range of $2.17-$2.25. Cash prices at the Transco Z6 hub in New York traded at $2.70/mmBtu, compared with Friday's range
of $3.55-$4.25.


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


  (END) Dow Jones Newswires

  January 25, 2016 10:34 ET (15:34 GMT)

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

012516 15:34 -- GMT
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