Dow Jones - Natural Gas Extends Slide As Winter Weather Fades

DJ Natural Gas Extends Slide as Winter Weather Fades

By Christian Berthelsen

     Natural-gas futures extended their slide to a 17-year low Wednesday as rising temperatures in the final weeks of
winter dashed hopes for late-season gas-fired heating demand.

     Natural gas futures ended down 3.7% at $1.6780 a million British thermal units on the New York Mercantile
Exchange, their lowest level since Feb. 26, 1999. The market has fallen nearly 32% since early January amid robust
production and weak demand as an El Ni?o-warmed winter has kept heating demand in check. Natural gas is a fuel
source in heating more than half of U.S. homes.

     Weather forecasts project a surge of much higher-than-normal temperatures over the eastern half of the U.S.
beginning next week, usually the final weeks of winter heating season. And analysts are expecting weekly U.S. inventory
data on Thursday to show a much lower-than-normal drawdown in inventories.

     Last week's data showed inventories at nearly 2.6 trillion cubic feet, 31% higher than year-ago levels and 29%
above average for this time of year.

     Analysts don't see any improvement on the horizon for those conditions. In weekly official U.S. inventory data
expected Thursday morning, analysts expect a stockpile decline of just 42 bcf, compared with an average drain of 137
bcf at this time of year. If the storage estimate is correct, inventories will be 49% above the five-year average for
this time of year.

     "The outlook remains bleak," research consultancy Gelber and Associates said in a note. "There's a lot of
potential for bearish news."

     Write to Christian Berthelsen at christian.berthelsen@wsj.com


  (END) Dow Jones Newswires

  March 02, 2016 15:44 ET (20:44 GMT)

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

030216 20:44 -- GMT
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