Dow Jones - Natural Gas Gains As Weather Forecasts Cool

DJ Natural Gas Gains as Weather Forecasts Cool


   By Timothy Puko


  Natural-gas prices broke a five-session losing streak, inching higher Wednesday because of a slightly brighter
outlook for short-term heating demand and bearish traders cashing out winning bets after five straight losing sessions.

  Futures for March delivery settled up 3.9 cents, or 2.1%, at $1.942 a million British thermal units on the New York
Mercantile Exchange.

  After five straight losing sessions, many bearish traders are likely taking profits, analysts said. That could send
prices higher because they would need to buy back contracts they sold, bidding up prices slightly in the process. That
is common before the federal government's weekly update on gas-storage levels, which is scheduled for Thursday morning.

  Gas has been sinking on weather reports showing normal to far above normal temperatures in most of the country
through the start of March. About half of U.S. households use natural gas as their primary heating fuel, so a warmer
winter can drag prices lower.

  Weather forecasts changed little Wednesday but did pull back slightly on the above-normal temperatures predicted for
some big mid-Atlantic and East Coast markets. Some forecasts also included below-normal temperatures in parts of
Appalachia and the Southeast, suggesting stronger-than-normal heating demand.

  The market could also get support from declining production, according to Simmons & Co. International in Houston. The
amount of working rigs has fallen to record lows.

  If temperatures are at normal levels for the rest of 2016, the outlook for natural-gas prices will gradually improve,
driven by flat to slightly declining production and increased demand, the energy investment bank said. "Currently,
natural gas remains under severe pressure."

  Gains are capped because stockpiles are so high, analysts said. Without an extreme cold spell and high heating
demand, stockpiles will finish the winter at or near record levels, possibly causing a glut deep into 2016. The country
is on pace to have 2.2 trillion cubic feet of gas in storage on April 1, which would be the second highest for winter's
end since at least 1976, Simmons said.


  (END) Dow Jones Newswires

  February 17, 2016 15:01 ET (20:01 GMT)

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

021716 20:01 -- GMT
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