DJ Natural Gas Extend Losses as Warm Weather Persists
By Timothy Puko
Natural gas futures are extending their losing streak into a fifth session as unseasonably warm weather further
lowers demand expectations.
Natural gas for January delivery fell 7.2 cents, or 1.9%, to $3.733 a million British thermal units on the New York
Mercantile Exchange. Prices are at their lowest point since Oct. 29 and down 17% from an intraday peak last week.
Forecasts are growing more confident that above-average temperatures will spread across the country through
mid-December. Home heating is the biggest driver of demand, and traders are expecting the unseasonably warm weather to
keep people from using as much gas heat as they usually would.
Analysts surveyed by The Wall Street Journal predicted U.S. gas stockpiles fell just 43 billion cubic feet last week,
a decline 14% below average for this time of year. The U.S. Energy Information Administration is scheduled to release
the weekly inventory data at 10:30 a.m.
The warm weather has traders expecting that below-average stockpile drains could become the norm for several weeks,
analysts said.
"These forecasts are forcing major revisions in end-of year-storage" estimates, Jim Ritterbusch, president of
energy-advisory firm Ritterbusch & Associates, said in a note to clients.
At this rate, producers, in just a few weeks, could close a storage deficit that has lingered since high demand last
winter drained stockpiles to 11-year-lows, analysts said. That would dramatically reduce the risk that a gas shortage
would send prices skyrocketing this year, discouraging traders from bidding up the price as they have done repeatedly
throughout the fall, analysts said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.52/mmBtu, compared with
Wednesday's range of $3.605-$3.65. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$3.48/mmBtu to $3.58/mmBtu, compared with Wednesday's range of $3.56 to $3.90.
Write to Timothy Puko at tim.puko@wsj.com
-30-
(MORE TO FOLLOW) Dow Jones Newswires
December 04, 2014 09:55 ET (14:55 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
120414 14:55 -- GMT
------
No comments:
Post a Comment