DJ Natural Gas Prolongs Slump on Weak Demand Data
By Christian Berthelsen
Natural gas prices extended their slide Thursday after weekly U.S. data showed demand slumped last week, reinforcing
the bleak outlook for gas-fired heating demand in the waning days of a tepid winter.
Natural gas futures lost 2.3% to settle at $1.6390 a million British thermal units on the New York Mercantile
Exchange, extending a 34% slide since early January. The market is trading at its lowest level in 17 years. Robust
output from U.S. shale production and weak demand thanks to mild winter weather have weighed on the market.
The U.S. Energy Information Administration said domestic inventories fell 48 billion cubic feet last week, roughly in
line with analyst projections in a survey by The Wall Street Journal that it would fall by 42 bcf. The number was far
lower than the 137 bcf-decline normally seen at this time of year.
Gas stockpiles are drawn down during the winter season, when cold weather sparks demand for gas-fired heating. But
the mild winter season this year has limited demand, while robust shale production has continued adding to supplies.
With last week's data, total U.S. inventories now stand at 2.536 trillion cubic feet, 45% higher than year-ago levels
and 35.6% above average for this time of year.
Natural gas is a fuel source in heating more than half of U.S. homes. After this week's cold snap, weather forecasts
are projecting a surge in warm temperatures starting next week, particularly in the Northeast, as winter fades and
spring appears on the horizon.
The natural gas market is "clearly focused on additional supply surplus expansion going forward," research
consultancy Ritterbusch and Associates said in a note.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
(END) Dow Jones Newswires
March 03, 2016 15:33 ET (20:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
030316 20:33 -- GMT
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