Dow Jones - Natural Gas Falls As Weather Forecasts Warm

DJ Natural Gas Falls as Weather Forecasts Warm



  By Timothy Puko


  Natural gas prices are continuing their retreat toward the $2 mark as warming weather forecasts for late February
keep traders thinking that winter heating demand won't be enough to resolve a potentially historic glut.

  Futures for March delivery recently fell 5.7 cents, or 2.7%, to $2.041 a million British thermal units on the New
York Mercantile Exchange. The retreat has given back about half of the gains from Friday and Monday, which had produced
the largest two-session rally in a month.

  High stockpiles keep capping rallies in the gas market, which has been trading within a 40-cent range for nearly a
month. Last year brought record-high production but then a mild fall and start to winter severely hurt demand for the
heating fuel. A record-high amount of it ended up in storage.

  Production hasn't fallen sharply since then, so stockpiles may still challenge their high point for winter's end
unless a lengthy stretch of extreme cold weather ramps up heating demand, analysts said. Updated weather forecasts keep
cutting the chances of that happening.

  Wednesday's weather updates show a return to above-normal temperatures, despite a brief blast of extreme cold
forecast for the eastern half of the country through this weekend. After that, normal and, sometimes, far-above normal
temperatures are likely to cover most of the country for at least 10 days, according to several private weather
companies.

  "It appears everyone is shaking off the frigid weather we are in store for, and focusing on the warmer weather that
is forecast for the middle of next week," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New
York.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.12/mmBtu, compared with Tuesday's
range of $2.16-$2.18. Cash prices at the Transco Z6 hub in New York last traded at $6.50/mmBtu, compared with Tuesday's
range of $2.30-$3.75.


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


  (END) Dow Jones Newswires

  February 10, 2016 10:30 ET (15:30 GMT)

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

021016 15:30 -- GMT
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