DJ Natural Gas Retreats on Warm Weather Forecasts
By Timothy Puko
Natural gas prices suffered the largest daily losses in a month Monday after warmer updates to weather models
pushed traders to sell as soon as electronic trading opened.
Futures for March delivery immediately dropped 4.5% at the open Sunday evening. They settled down 14.6 cents, or
6.4%, at $2.152 a million British thermal units on the New York Mercantile Exchange. It was the largest losses since
Dec. 30 and snapped an eight-session winning streak.
The market falling immediately on Sunday evening is usually a sign that traders are reacting to two days of
weather updates after the market has been closed for the weekend. Government weather models across the board cut back
on their predictions for heating-degree days, a measure of weather-related gas demand, Commodity Weather Group LLC
reported to clients on Sunday morning.
Weather is one of the biggest drivers for U.S. natural-gas prices because about half of the country's homes use
gas for heat. Private forecasters showed few changes Monday morning and a mix of above- and below-normal temperatures
floating around the country for the next two weeks. But they do show solidly-above-normal temperatures in many of the
country's biggest gas markets from Chicago to Boston into the second week of February.
"The reality of warm temperatures is sinking in," said Frank Clements, co-owner of Meridian Energy Brokers Inc.
outside New York. He noted predictions of nearly 60-degree highs in New York on Wednesday. "Without the threat of very
cold weather, every rally is still a selling point."
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
February 01, 2016 15:29 ET (20:29 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
020116 20:29 -- GMT
------
No comments:
Post a Comment