Dow Jones - Natural Gas Retreats On Warmer Forecasts

DJ Natural Gas Retreats on Warmer Forecasts

By Timothy Puko

     Natural gas prices edged lower Tuesday, as warmer forecasts and expectations for softer demand later this month
took hold of the market's attention.

     Futures for February delivery settled down 0.9 cent, or 0.4%, at $2.091 a million British thermal units on the New
York Mercantile Exchange, the contract's lowest settlement since Dec. 24. Gas has lost 15% in just more than a week.

     Weather forecasts are showing above-normal temperatures settling across nearly the entire country for the last
week of January and the beginning of February. About half of U.S. homes rely on gas for heat, making winter weather the
market's primary driver.

     Prices retreated from gains earlier in the morning, with near-term cold helping to support the market.
Temperatures of 3 to 15 degrees Fahrenheit below normal are likely to settle across the eastern half of the country
until the end of the week, private forecasters said.

     "The domestic models show a few cold fronts, but none of them are projected to stay long enough to produce lasting
heating demand," Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in
a note.

     The market is becoming range-bound, said Dean Hazelcorn, trader at the brokerage Coquest Inc. in Dallas. He noted
a plunge below $2.00/mmBtu last month lasted less than two weeks, and an ensuing surge above $2.30/mmBtu faded just as
quickly.

     "We've reached the happy middle," Mr. Hazelcorn said. "And that's the way it will be until something extreme
happens."

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


  (END) Dow Jones Newswires

  January 19, 2016 15:27 ET (20:27 GMT)

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