Dow Jones - Natural Gas Rises On Signs Of Stronger Demand

DJ Natural Gas Rises on Signs of Stronger Demand



  By Timothy Puko


  Natural gas prices are rising for a second-straight session on improving signs of demand.

  Prices have been trending up since Thursday morning when government data showed stockpiles shrank by 117 billion
cubic feet in the week ended Jan. 1, about 17% higher than expected. Traders see that as a sign of a tighter market
with more demand from home-heating and just as some supply is blocked off from ice clogging pipes key gas fields.

  Friday's weather updates also show slightly more cold in the forecast for the coming weeks, suggesting that trend
could continue. About half of U.S. homes rely on gas for heat, making winter weather the market's primary driver.
Private weather forecasts show some deep cold heading into the central part of the country this week, with slightly
cooler-than-normal temperatures lingering into late January.

  Futures for February delivery recently traded up 4.3 cents, or 1.8%, at $2.425 million British thermal units on the
New York Mercantile Exchange. That puts prices within a few cents of two-month intraday highs, and breaking above that
level could itself help keep prices elevated, brokers and traders said.

  "I just want to see follow through" above that level before believing the rally will hold, said Scott Gettleman, an
independent trader in New York. "It's definitely colder."

  But Mr. Gettleman and others are skeptical that cold is enough to keep prices rallying. Gas futures fell below
$1.80/mmBtu just last month, setting a new inflation-adjusted low in Nymex history because of a warm December that
limited heating demand. Production is still near a record pace and stockpiles are on pace to challenge their record
high for the end of winter, factors which haven't appeared to change even as futures rallied into a bull market at the
end of December.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.4775/mmBtu, compared with a range
of $2.315-$2.42 on Thursday, the last session before the Christmas holiday. Cash prices at the Transco Z6 hub in New
York last traded at $3.55/mmBtu, compared with Thursday's range of $2.50-$2.65.


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


  (END) Dow Jones Newswires

  January 08, 2016 10:33 ET (15:33 GMT)

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

010816 15:33 -- GMT
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