Dow Jones - Natural Gas Sinks On Weather Outlook

DJ Natural Gas Sinks on Weather Outlook


   By Timothy Puko


  Natural-gas prices are posting their largest losses in nearly two weeks as warmer weather forecasts renew concerns
about weak demand and bulging stockpiles.

  Futures for February delivery recently fell 9.1 cents, or 3.8%, to $2.305 a million British thermal units. Gas has
lost 6.8% in two sessions after hopes for increased winter heating demand took prices to a nearly three-month high on
Friday.

  Updated weather forecasts Tuesday show an ongoing cold spell and spike in heating demand in some parts of the country
could be shorter than expected. About half of U.S. households use natural gas as their primary heating fuel, making
winter weather the market's primary driver for prices.

  Near-term forecasts that had shown below-normal temperatures spreading across the middle of the country now show that
cold front breaking up. They also show next week's cold blast coming to the Midwest looking slightly less severe than
expected and then followed by above-normal temperatures spreading across large parts of the country.

  That is a big problem for gas prices because stockpiles are so high, analysts said. Many are predicting that without
an extreme spell of cold and high heating demand, stockpiles will finish the winter at or near record levels, possibly
causing a glut to linger deep into next year.

  "We expect this week's price slide to continue now that most temperature views beyond this week are beginning to take
on a more bearish appearance," Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a
note.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.38/mmBtu, compared with Monday's
range of $2.46 to $2.56. Cash prices at the Transco Z6 hub in New York last traded at $8.00/mmBtu, compared with
Monday's range of $4.25 to $4.85.


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


  (END) Dow Jones Newswires

  January 12, 2016 10:23 ET (15:23 GMT)

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

011216 15:23 -- GMT
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