Dow Jones - Natural Gas Slumps As Traders Take Profits

DJ Natural Gas Slumps as Traders Take Profits


   By Christian Berthelsen


  Natural gas futures slumped Monday as bullish traders closed out positions and took profits from the recent rally
that has come in the face of weakening supply-and-demand conditions.

  Natural gas futures for April delivery ended down 4.1% at $1.8280 a million British thermal units on the New York
Mercantile Exchange. Natural gas prices rallied 18% from a 17-year low early this month but have since given back more
than 5% of those gains as weak demand and booming production have left the market well oversupplied.

  "Some shrinkage in the huge supply surplus will be required before price advances are to prove sustainable," research
consultancy Ritterbusch and Associates said in a note.

  The selloff Monday came even as weather forecasts indicated a bout of early spring cold could boost demand for
gas-fired heating in some parts of the country. Though late-season cold temperatures are expected to persist into early
April, much of it will likely fall in the Midwest, while the key eastern seaboard demand area will likely see normal
and even above-normal temperatures.

  U.S. inventories are now 48% higher than average for this time of year. Some analysts believe this week's data will
show an increase in supplies, a rare occurrence for a winter week when cold temperatures usually prompt drawdowns to
heat homes and offices.

  "Finally the fundamentals have lifted their head and that's why the market turned back around," said Gene McGillian,
senior analyst at brokerage Tradition Energy.


  (END) Dow Jones Newswires

  March 21, 2016 15:52 ET (19:52 GMT)

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

032116 19:52 -- GMT
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