Dow Jones - Natural Gas Falls Then Rebounds On Weather

DJ Natural Gas Falls, Then Rebounds on Weather

  (Adds prices and details)


  By Timothy Puko and Nicole Friedman


  NEW YORK--Natural-gas futures rose for a fourth straight session Monday on new weather forecasts that raised
expectations for strong heating demand.

  Moderate weather has decreased demand for natural gas as an indoor-heating fuel this winter, pushing the market into
oversupply and prices lower. Initial forecasts released Monday called for warmer-than-average temperatures to return in
the next two weeks, but the widely watched noon update showed more signs that time period will bring below-average
temperatures.

  Futures for February delivery settled up 1.9 cents, or 0.9%, at $2.158 a million British thermal units on the New
York Mercantile Exchange, the highest settlement since Jan. 13. It had fallen as far as $2.081 in earlier trading.

  "It looks like early [February] heating demand is all or nothing," Aaron Calder, senior market analyst at
energy-consulting firm Gelber & Associates in Houston, said in a note. "For now the market is ... flat because both hot
and cold scenarios look equally likely to happen."

  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 cut 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."

   FUTURES        SETTLEMENT  NET CHANGE
   Nymex February $2.158      +1.9c
   Nymex March    $2.155      +1.4c
   Nymex April    $2.241      +1.7c

   CASH HUB      RANGE        PREVIOUS SESSION

  El Paso Perm  $2.06-$2.10  $2.005-$2.06
   El Paso SJ    $2.09-$2.12  $2.04-$2.07
   Henry Hub     $2.10-$2.175 $2.17-$2.25
   Katy          $2.09-$2.12  $2.11-$2.16
   SoCal         $2.20-$2.25  $2.11-$2.22
   Tex East M3   $1.50-$1.62  $2.10-$2.65
   Transco 65    $2.09-$2.14  $2.17-$2.195
   Transco Z6    $2.60-$2.75  $3.55-$4.25
   Waha          $2.09-$2.10  $2.05-$2.06


  Write to Timothy Puko at tim.puko@wsj.com and Nicole Friedman at nicole.friedman@wsj.com


  (END) Dow Jones Newswires

  January 25, 2016 15:45 ET (20:45 GMT)

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

012516 20:45 -- GMT
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