DJ Natural Gas Extends Two-Month High in Seesaw Trading
By Timothy Puko
Natural gas prices are extending the two-month high they set Tuesday but have also flipped into losses several times
as traders and analysts remain divided about the impact of falling production and heavy stockpiles.
Natural gas for May delivery recently gained 1.7 cents, or 0.8%, to $2.105 a million British thermal units on the
Nymex. It hit an intraday high of $2.137/mmBtu, last hit on Feb. 8.
The market had its best daily performance of the year Tuesday, up 7.6% in one session as analysts pointed to signs of
slowing production and said weather reports indicate stronger-than-expected demand on the way. Many have been betting
that massive cutbacks across the drilling industry are going to lead to similar cutbacks in production that may not be
able to keep pace with rising demand starting later this year.
But stockpiles are also still coming off a record high for the end of winter after mild weather damped demand for the
heating fuel. Coal, which competes with gas for demand in the power sector, is also stockpiled at high levels at power
plants, and a mild boost in weather-related demand in the weeks to come may not be enough to significantly trim the
glut, analysts said.
"We see the current storage outlook as more neutral than bullish," Tim Evans, analyst at Citi Futures Perspective in
New York, said in a note.
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
April 20, 2016 12:28 ET (16:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
042016 16:28 -- GMT
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