Dow Jones - Natural Gas Prices Hold As Weather Stabilizes

DJ Natural Gas Prices Hold as Weather Stabilizes



  By Timothy Puko


  Natural gas prices are holding close to unchanged and volatility is plummeting as weather models show mixed signals
about heating demand in late January.

  Futures for February delivery recently gained 2.2 cents, or 1%, to $2.347 a million British thermal units.
Natural-gas futures have stabilized since a seven-session surge put them into a bull market a week ago. They have
traded between $2.188/mmBtu and $2.387/mmBtu for six sessions, with Wednesday's prices bouncing in the top half of that
range.

  Prices have tended to hover just above unchanged Wednesday, a day after colder weather helped push an afternoon
rally. Some forecast models predict colder-than-normal temperatures lingering into the second half of January, longer
than some private forecasters had projected. About half of U.S. households use natural gas as their primary heating
fuel, making winter weather the market's primary driver for prices.

  Weather models showed mixed updates overnight, according to Commodity Weather Group LLC in Bethesda, Md. It and other
private forecasters are still predicting extreme cold across the middle of the country next week will give way to
near-normal temperatures across nearly the entire country 11 to 15 days out. But meteorologists have also warned that
those forecasts are even more uncertain than usual.

  The uncertainty has sent traders out of the market for a pause, leading to recent range-bound prices, brokers and
analysts said. Many will be looking to see how the weather affects heating demand, and if power-sector demand keeps up
now that the recent rally will have power plants paying more for gas.

  The changing weather forecasts "should keep the market above $2 in the near term until we see how much damage has
been done to demand by the recent rally in prices," Scott Shelton, broker at ICAP PLC, said in a note.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.36/mmBtu, compared with Tuesday's
range of $2.30 to $2.34. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $2.57/mmBtu to
$2.90/mmBtu, compared with Tuesday's range of $3.15 to $4.00.


  (END) Dow Jones Newswires

  January 06, 2016 10:29 ET (15:29 GMT)

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

010616 15:29 -- GMT
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