Dow Jones - Natural Gas Prices Wane As Forecasts Moderate

DJ Natural Gas Futures Wane as Cold Forecasts Moderate

By Christian Berthelsen

     Natural gas futures fell back Tuesday from the previous session's soaring rally as demand expectations moderated
with a softening forecast for extremely cold weather.

     Natural gas for December delivery was down 8.4 cents, or 1.8%, to $4.2570 a million British thermal units on the
New York Mercantile Exchange, paring some of Monday's nearly 8% gain, which was the largest one-day surge in nearly
nine months.

     The pullback came as traders took profits from a market rally that some analysts said was overdone, and forecasts
for below-normal temperatures over the eastern half of the U.S. at the end of November and beginning of December
softened a bit.

     Commodity Weather Group said while the overall outlook would likely keep gas demand steady, temperatures for the
end of the period were trending warmer than prior projections.

     The seesawing forecasts have brought volatility back into the market, with prices posting large swings in recent
weeks as outlooks change. Analysts say that looks to continue for the foreseeable future.

     "The price volatility is definitely weather-driven," said Gene McGillian, senior analyst at brokerage Tradition
Energy in Stamford, Conn. "I expect more of that, especially as we get through the beginning of this heating season."

     With the strong cold start to the fall and winter heating season, some analysts are projecting an end to the
32-week run of increases to stockpiles of the fuel, as demand for gas-fired heating begins to draw on supplies.
Producers have rapidly restored inventories depleted by the severe winter last season, though overall levels remain
6.2% below average for this time of year.

     Stockpiles have reached 3.6 trillion cubic feet, a level analysts say should be adequate to get through heating
season. The U.S. Energy Information Administration is scheduled to release the latest figures at 10:30 a.m. Thursday.

     "This exceptionally cold fall period is beginning to conjure up images of a repeat of last year's extreme cold,"
research consultancy Ritterbusch and Associates said in a note.

     In the physical market, cash prices for next-day delivery of natural gas at the benchmark Henry Hub in Louisiana
last traded at $4.30 a million Btus, at the top of Monday's range of $4.19-$4.30. Prices for next-day gas delivery at
the Transco Z6 hub in New York last traded at $6.45, below Monday's range of $7.40-$10.15.

     Write to Christian Berthelsen at christian.berthelsen@wsj.com


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  (END) Dow Jones Newswires

  November 18, 2014 09:42 ET (14:42 GMT)

  Copyright (c) 2014 Dow Jones & Company, Inc.

111814 14:42 -- GMT
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