DJ Natural Gas Gains, Breaking Losing Streak
By Timothy Puko
Natural gas prices rose Tuesday, rebounding from nearly two-year lows and snapping a three-session losing streak.
The front-month January contract settled up 2.7 cents, or 0.9%, at $3.171 a million British thermal units on the New
York Mercantile Exchange. The bounce ended a losing streak that had brought prices down as much as 16%.
Prices flip-flopped around unchanged for most of the session, finishing higher from a rally that started around 1
p.m. Brokers and analysts say there are still bearish trends in the market, making a turnaround difficult.
Power plants are likely to start switching to use more natural gas at these prices, Aaron Calder, senior market
analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. And there is still plenty of time for
cold weather to drive demand and possibly curtail some production in January and February, analysts said.
"The table is set for a potential rebound, but none of it matters if the mild winter continues," Mr. Calder said.
About half of all U.S. homes use natural gas for home heating, making it the primary driver for demand. Colder
temperatures are on the way, but they're likely to hit 60 degrees Fahrenheit first, on Christmas, in major northern
heating markets, according to MDA Information Systems LLC.
"You're not burning the gas," said Frank Clements, co-owner of Meridian Energy Brokers Inc.
Temperatures from 2- to 15-degrees-below normal will stretch from Pittsburgh to Los Angeles around New Year's Day,
but that severe cold is likely to dissipate by the following weekend, meteorologists said. And production is so strong
that traders and analysts believe it would take sustained severe cold to absorb the record supply.
--Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 23, 2014 15:02 ET (20:02 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
122314 20:02 -- GMT
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