DJ Natural Gas Pushes to New Lows on Even Softer Demand Outlook
By Timothy Puko
NEW YORK--Natural gas is pushing its new 2014 low even lower Monday morning as warm weather forecasts keep softening
an already-weak October demand outlook.
Natural gas for November delivery is down 8.1 cents, or 2.2%, at $3.685 a million British thermal units on the New
York Mercantile Exchange. The is the first time natural gas has traded at less than $3.70/mmBtu since Nov. 22. Prices
are down nearly 6% in now five straight losing sessions.
Weather forecasts, already warm for October, grew even warmer over the weekend. Weather is one of the most important
variables for natural gas prices because the fuel heats half of U.S. homes. The new forecasts suggest this October will
be the third warmest in 15 years: comfortable weather with little demand for gas heating, according to Commodity
Weather Group LLC in Bethesda, Md.,
"We're seeing a massive demand contrast to last year. Huge demand losses year on year," company president Matt Rogers
said. "I think that's what 's getting the market today."
Without immediate demand, producers are going to get an extended season for stockpile additions, further reducing the
risk for any shortages in the winter to come, Teri Viswanath, natural-gas strategist at BNP Paribas SA in New York,
said in a note. That will leave futures anchored below $4/mmBtu until heating demand grows large enough to start taking
withdrawals from storage, she added. Analysts have estimated that may not happen until mid-November, a couple weeks
later than usual.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.71/mmBtu, compared with Friday's
range of $3.68-$3.74. Cash prices at the Transco Z6 hub in New York last traded at $2.35/mmBtu, compared with Friday's
range of $1.67 to $2.06.
Write to Timothy Puko at tim.puko@wsj.com
(END) Dow Jones Newswires
October 20, 2014 10:04 ET (14:04 GMT)
Copyright (c) 2014 Dow Jones & Company, In
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