DJ Natural-Gas Futures Fall as Traders Take Profits From Rally
By Christian Berthelsen
Natural-gas futures sold off sharply Monday as traders took profits from a run of nine straight rising sessions.
The front-month December natural-gas contract ended the day down 15.7 cents, or 3.6%, at $4.255 a million British
thermal units on the New York Mercantile Exchange, ending a string of gains that saw prices rise more than 23% during
that time.
With a looming onslaught of fiercely cold weather over much of the U.S. in the next two weeks, analysts said traders
were taking the opportunity to lock in profits from bullish trades now that the mercury is set to drop.
We had an incredible streak of gains, and the storm comes tomorrow," said Phil Flynn, an account executive with
brokerage Price Futures Group in Chicago. "They've been buying the rumor nine days in a row, and selling the fact it's
about to descend on us."
Forecasters are predicting a larger and colder spate of weather in the coming days over the Plains and Midwest states
that will reach as far south as Texas and push eastward as well through mid-November. Though the worst is expected to
subside going into late November, temperatures are expected to remain much-below normal over the Northeast, Midwest,
Plains and parts of the South, according to Commodity Weather Group.
Analysts are beginning to make weekly storage inventory projections for U.S. data set to be released later in the
week, and many are predicting another strong rise in supplies thanks to mild weather last week that drove little
demand. But all that could change beginning this week, as cold temperatures prompt strong draws on supplies for home
and office heating and electricity generation.
This week's inventory increase will likely bring nationwide stockpiles to around 3.6 trillion cubic feet, an amount
analysts say should be adequate to get through another heating season, even though the number is shy of year-ago and
average levels.
"Starting the season with slightly less in storage will mean a higher likelihood of price spikes," Houston research
consultancy Gelber & Associates said in a note. Still, existing inventories are "more than enough to assuage reasonable
shortage concerns."
FUTURES SETTLEMENT NET CHANGE
Nymex December $4.255 -15.7c
Nymex January $4.351 -15.6c
Nymex February $4.305 -15.2c
CASH HUB RANGE PREVIOUS DAY
El Paso Perm $4.10-$4.18 $3.66-$3.785
El Paso SJ $4.10-$4.205 $3.68-$3.80
Henry Hub $4.065-$4.25 $3.94-$4.10
Katy $3.96-$4.10 $3.85-$4.05
SoCal $4.34-$4.40 $3.81-$3.98
Tex East M3 $3.47-$3.68 $3.24-$3.67
Transco 65 $4.11-$4.18 $3.9525-$4.03
Transco Z6 $3.49-$3.65 $3.20-$3.55
Waha $4.10-$4.20 $3.76-$3.83
Write to Christian Berthelsen at christian.berthelsen@wsj.com
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(END) Dow Jones Newswires
November 10, 2014 15:19 ET (20:19 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
111014 20:19 -- GMT
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