Dow Jones - Natural Gas Slips As Traders Focus On Oversupply

DJ Natural Gas Slips as Traders Focus on Oversupply


   By Nicole Friedman


  NEW YORK--Natural-gas prices fell Monday on continued concerns about oversupply.

  Prices wavered between gains and losses throughout the session as traders weighed expectations of increased
consumption in the coming weeks against currently ample inventories of the fuel.

  Warmer-than-average temperatures in recent months have cut demand for indoor heating in homes and offices, helping
push the natural-gas market into oversupply. About half of U.S. households use natural gas as their primary heating
fuel.

  Forecasts for the next two weeks call for colder weather in the central U.S., according to WSI Corp.

  "The return of cold weather brings back price volatility," said Citigroup Inc. analysts in a note. "U.S. gas has a
history of delivering surprises due to sharp turns toward colder weather."

  However, "the first major cold air of the season that is expected to envelop most of the country next week has been
largely priced in," said energy-advisory firm Ritterbusch & Associates in a note.

  Natural gas futures for February delivery settled down 0.3 cent, or 0.1%, at $2.334 a million British thermal units
on the New York Mercantile Exchange.

  Raymond James analysts lowered their natural-gas price forecast for 2016 to $2 a thousand cubic feet, down from their
prior forecast of $2.35/mcf. This is the bank's third forecast cut since August.

  "The U.S. gas market has been structurally oversupplied for years. We expect the glut to persist in 2016," the bank
said.

      FUTURES       SETTLEMENT      NET CHANGE
   Nymex February    $2.334             -0.3c
   Nymex March       $2.350             -1.3c
   Nymex April       $2.373             -1.4c
   CASH HUB           RANGE             PREVIOUS SESSION
   El Paso Perm    $2.33-$2.425          $2.35-$2.4525
   El Paso SJ      $2.35-$2.50           $2.40-$2.52
   Henry Hub       $2.32-$2.415          $2.285-$2.35
   Katy            $2.35-$2.40           $2.28-$2.39
   SoCal           $2.50-$2.65           $2.51-$2.63
   Tex East M3     $3.00-$4.00           $1.50-$1.75
   Transco 65      $2.3725-$2.41         $2.23-$2.38
   Transco Z6      $6.00-$9.00           $2.90-$3.20
   Waha            $2.37-$2.41           $2.36-$2.44


  Write to Nicole Friedman at nicole.friedman@wsj.com


  (END) Dow Jones Newswires

  January 04, 2016 15:21 ET (20:21 GMT)

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

010416 20:21 -- GMT
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