Dow Jones - Natural Gas Falls As Weather Forecasts Cool

DJ Natural Gas Falls as Weather Forecasts Cool



  By Timothy Puko


  Natural gas prices inched lower Wednesday as hot near-term weather forecasts got slightly cooler, weakening
expectations for strong summer demand.

  Natural gas for August delivery settled down 2.2 cents, or 0.9%, at $2.863 a million British thermal units on the New
York Mercantile Exchange. Prices briefly moved into positive territory at the start of traditional U.S. trading hours,
but retreated quickly.

  The move down comes after the market had its strongest daily rally in months on Tuesday, up 7.4%. Prices are still up
46% since the June contract expired at just $1.963/mmBtu on May 26.

  That created an opportunity for many traders to cash out winning bets Tuesday once weather forecasts appeared cooler,
a trader and analyst said. Traders have steadily moved into bullish positions in recent months--betting on falling
supply and rising demand to resolve a big glut--and prices can fall when those traders sell their contracts to close
out winning bets.

  "Today is just digesting the Thanksgiving dinner," said Donald Morton, senior vice president at Herbert J. Sims &
Co., who runs an energy-trading desk.

  Weather forecasts are still showing hot weather across the country, which can raise demand for gas-fired power to run
air conditioners in the summer. But forecasts did cool slightly in some parts of the country for the next five days.
MDA Weather Services in Maryland is forecasting temperatures as much as 8-degrees-Fahrenheit-below normal in parts of
the Midwest from Western Kansas to Western Pennsylvania.

  Many may have also wanted to get out of the market ahead of Thursday's weekly inventory report, which often brings
some of the market's most volatile trading, said Tim Evans, analyst at Citi Futures Perspective in New York. The U.S.
Energy Information Administration releases its storage data update at 10:30 a.m.

  It is likely to report stockpiles grew by 47 billion-cubic feet of gas during the week ended June 24, according to
the average forecast of 18 analysts, brokers and traders surveyed by The Wall Street Journal. If the storage estimate
is correct, inventories as of June 24 totaled 3 trillion cubic feet, 18% above levels from a year ago and 21% above the
five-year average for the same week.


  Write to Timothy Puko at tim.puko@wsj.com


  (END) Dow Jones Newswires

  June 29, 2016 14:47 ET (18:47 GMT)

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

062916 18:47 -- GMT
------