DJ Natural-Gas Has Worst Day of Month on Sagging Demand
By Timothy Puko
NEW YORK--Natural-gas prices had their worst day in a month as sagging home heating demand pushed a selloff.
The front-month November contract settled down 14.1 cents, or 3.5%, to $3.898 a million British thermal units on
the New York Mercantile Exchange. Front-month prices haven't fallen that much in one day since Sept. 2, when they lost
4.3%.
Record production from the unconventional drilling boom keeps capping the market at around $4/mmBtu, where trading
closed on Friday. Some traders have briefly pushed gas beyond that point several times since August, in anticipation of
peak winter demand season when extreme weather can lead to price spikes. Without any sign of cold weather, strong
production has kept them from sustaining those prices.
Monday's retreat put natural gas back in the middle of the $3.80/mmBtu-to-$4/mmBtu trading range where it has
spent most of the past two months.
Cool weather hasn't driven as much demand for heating as expected to start October, said Aaron Calder, senior
market analyst at energy-consulting firm Gelber & Associates in Houston. Several forecasts are also showing more
comfortable conditions coming than they did last week, suggesting lower-than-expected demand on the way.
"The market is at a crossroads," Mr. Calder said in a note. "Production is growing, and current demand is low,
which is why the market is selling off. The current fundamental picture is bearish but strong, sustained, heating
demand can trump that."
Write to Timothy Puko at timothy.puko@wsj.com
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(END) Dow Jones Newswires
October 06, 2014 15:05 ET (19:05 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
100614 19:05 -- GMT
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