DJ Natural Gas Extends Selloff as Weather Warms Up
By Christian Berthelsen
Natural-gas futures extended a slide from last week as temperature forecasts rose and expectations for gas-fired
heating demand fell.
Natural gas for December delivery fell 22 cents, or 5.2%, to $4.046 a million British thermal units on the New
York Mercantile Exchange.
With the December contract expiring this week, most of the volume in the market has moved forward into the January
contract, which was down 20 cents, or 4.5%, to $4.2170 a million Btus.
Traders bid up the market last week as the first appearance of cold weather signaled the start of the heating
season, but the market began to fall back as the outlook moderated. The December contract fell 22.3 cents on Friday,
and the selloff continued Monday as the weather outlook continued to warm up.
"As the weather turns unseasonably warm once again, the spot natural gas futures contract has been turning south,"
Energy Management Institute analyst Dominick Chirichella said in a note.
Commodity Weather Group said Monday's forecast marked the biggest warming revision of the heating season thus far.
The group said a band of above-normal temperatures would cover much of the Deep South beginning Nov. 29 with some
temperatures in the 70s, and that much-above-normal temperatures would dominate the Eastern Seaboard with highs in the
60s through the first week of December.
The U.S. Energy Information Administration reported last week that the amount of gas in storage declined 17
billion cubic feet in the first net withdrawal of the heating season. Stockpiles stood at 3.59 trillion cubic feet as
of Nov. 14, 6.4% below average levels. The gas market has experienced huge swings in recent weeks in reaction to
forecast revisions, as traders speculate whether supplies will be adequate to meet demand through fall and winter.
In physical markets, cash prices for next-day delivery of natural gas at the benchmark Henry Hub in Louisiana last
traded at $4.05 a million Btus, below Friday's range of $4.29 to $4.35.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
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(END) Dow Jones Newswires
November 24, 2014 09:13 ET (14:13 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
112414 14:13 -- GMT
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