DJ Natural Gas Resumes Rally as Summer Nears
By Timothy Puko
Natural gas prices restarted their rally Tuesday, going higher for a seventh time in eight sessions, as traders
continue to anticipate that the market's recent low will entice bargain-buyers and falling production.
Futures for April delivery settled up 3.2 cents, or 1.8%, at $1.851 a million British thermal units on the New York
Mercantile Exchange. It is the highest settlement since Feb. 18.
The market had slumped more than 30% from its January high through March 3, hitting a new 17-year low and encouraging
traders who bet on a fall to cash out winning bets. They have to buy back contracts to do that, and the ensuing rally
has lifted prices 13%.
"This market appears poised for a pause following the dramatic price decline," said Jim Ritterbusch, president of
energy-advisory firm Ritterbusch & Associates.
Traders are gearing up for hotter weather in the spring and summer that usually drives stronger demand for gas to
feed power plants, analysts said. That demand could be even bigger this year because of the recent lows, with more
power producers lured away from coal to burn cheaper natural gas.
Many are also anticipating output to fall from its near-record levels as the low prices continue to get producers to
shut down rigs and slow their work. The number of working rigs has recently dropped to historic lows, but Mr.
Ritterbusch and others did warn that has yet to cause lower production and that prices could fall again if heavy
production keeps stockpiles at historically high levels.
"For prices to break through $2.00, the market would need evidence of a production drop off or a new source of
demand," said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston.
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
March 15, 2016 15:24 ET (19:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
031516 19:24 -- GMT
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