DJ Natural Gas Rebounds on Weather Outlook
By Nicole Friedman
NEW YORK--Natural-gas prices rose from two-month lows Monday on colder weather forecasts for the next two weeks, but
a growing oversupply of fuel capped gains.
Natural gas for March delivery recently rose 2.4 cents, or 1.3%, to $1.828 a million British thermal units on the New
York Mercantile Exchange.
Prices fell to the lowest level since December last week as moderate demand and ongoing high production expanded the
glut of natural gas in storage. Inventories of natural gas stood 26% above the five-year average for this time of year
as of Feb. 12, according to the Energy Information Administration.
J.P. Morgan cut its natural-gas price average forecast for 2016 to $2.37/mmBtu, down from its previous call of
$2.57/mmBtu. "Over the next two weeks, we expect the year-over-year storage surplus to rise ... just one of several
metrics that perpetuates the pervasive bearish psychology looming over the U.S. natural gas market," the bank said.
However, weather forecasts released Monday suggested that temperatures could turn colder in the next two weeks, which
could boost demand for natural gas an indoor-heating fuel.
"Next weekend a much colder weather system will impact the northern US with frigid temperatures over the Midwest and
Northeast," said NatGasWeather.com in a note. "This will bring a marginal bump in nat gas demand." Some
colder-than-normal temperatures are also expected in the next eight to 15 days, according to the note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $1.80/mmBtu, compared with Friday's
range of $1.785-$1.825. Cash prices at the Transco Z6 hub in New York last traded at $1.85/mmBtu, compared with
Friday's range of $1.70-$1.77.
Write to Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
February 22, 2016 11:06 ET (16:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
022216 16:06 -- GMT
------
No comments:
Post a Comment