DJ Cold Weather Forecasts Push Natural Gas to Newer One-Month High
By Timothy Puko
Natural gas prices added to their new one-month high as cold weather forecasts grew even colder.
Natural gas for December delivery is up 2.5 cents, or 0.6%, at $4.071 a million British thermal units on the New York
Mercantile Exchange. The incremental gains pushed the gas rally into its sixth straight session, adding to the
one-month high it had reached on Monday.
Cold weather forecast for everything east of the Rocky Mountains has buyers pouncing on the chance for rising natural
gas heating demand. Half of all U.S. homes use natural gas as their heating fuel, making the natural gas market most
sensitive to weather.
The forecasts started this weekend to predict temperatures as much as 10-degrees-Fahrenheit below normal. Tuesday's
updates showed that becoming slightly more severe.
Some traders said the cold next week isn't as big an influence as the implications for later this winter. Many are
thinking of last winter's record cold and demand spikes that pushed prices above $6/mmBtu.
That's starting to become a "reasonable risk," said Matt Rogers president of Commodity Weather Group LLC in Bethesda,
Md. Its newest weather model suggests the cold pattern will hold beyond next week and possibly all the way through to
early December. Both Commodity Weather Group and WeatherBELL Analytics LLC released December forecasts this week that
also leaned colder than they initially predicted.
"There's a number of factors out there that are converging to suggest we'll get a colder December," Mr. Rogers said.
"It's really spooking a lot of people" in energy markets.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.62/mmBtu, compared with Monday's
range of $3.62-$3.90. Cash prices at the Transco Z6 hub in New York last traded at $2.80/mmBtu, compared with Monday's
range of $2.605 to $2.70.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
November 04, 2014 09:38 ET (14:38 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
110414 14:38 -- GMT
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