DJ Natural Gas Ticks Lower on Warmer Forecasts
By Nicole Friedman
NEW YORK--Natural-gas prices weakened Wednesday as forecasts for warmer-than-normal weather in the next two weeks
lowered expectations of strong demand for the heating fuel.
Natural gas for November delivery recently fell 5.8 cents, or 1.5%, to $3.899 a million British thermal units on the
New York Mercantile Exchange.
Natural gas sees the strongest demand in the winter, as people turn on indoor heating in homes and offices. About
half of U.S. households use natural gas as their primary heating fuel.
However, forecasters expect mild weather this month. The outlook for the next 11 to 15 days calls for "below-average
temperatures across the East and above average warmth across a large portion of the Western and Central U.S.," said
forecaster WSI Corp. in a note Wednesday.
In addition, "a consensus appears to be evolving in favor of a comparatively mild November," said energy-advisory
firm Ritterbusch & Associates in a note.
On Tuesday, the U.S. Energy Information Administration forecast that natural-gas prices would hold at about $4.12 a
thousand cubic feet from October through March, down about 1.7% from what the agency forecast a month ago. The EIA also
lowered its price forecast for 2015 by 1% to $3.95/mcf.
The recent frigid winter depleted natural-gas stockpiles, sending prices spiking and prompting concerns that
producers would be unable to refill inventories by this winter.
However, robust production and a mild summer, which reduced demand for natural-gas powered electricity to run
air-conditioning units, have eased those fears.
As of Sept. 26, natural-gas stocks stood at 3.1 trillion cubic feet, just 11% below the five-year average for the
week.
On Tuesday, the EIA said it has raised its expectations for gas stockpiles to total 3.53 trillion cubic feet by Nov.
1. While that's still 8% below last year's Nov. 1 level, the EIA expects an extra 3.5 billion cubic feet a day of gas
production to help cover any shortfall.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.90/mmBtu, according
to Intercontinental Exchange Inc., versus Tuesday's average of $3.8702/mmBtu.
Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded between $1.77 and $1.89/mmBtu,
compared with $1.8394/mmBtu Tuesday.
Write to Nicole Friedman at nicole.friedman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
October 08, 2014 09:24 ET (13:24 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
100814 13:24 -- GMT
------
No comments:
Post a Comment