DJ Natural Gas Rises on Prospects for Stronger Heating Demand
By Timothy Puko
Natural-gas prices are rising Wednesday as cold forecasts for late December show prospects for stronger demand.
Natural gas for January delivery is up 7.6 cents, or 2.1%, at $3.695 a million British thermal units on the New York
Mercantile Exchange. The gains come after two days of losses that had brought Tuesday's closing price within 3 cents of
a seven-week low.
Forecasts for 11 to 15 days out are looking increasingly cold. Half of all U.S. homes rely on natural gas for heat,
making cold weather a prime driver for demand. Below-normal temperatures will be sweeping across nearly all of the
country, with temperatures more than 8-degrees-below normal from Chicago to Denver, according to Commodity Weather
Group.
The market had moved down Tuesday despite these weather patterns creeping into the forecasts. Above-normal
temperatures are still prevalent through Christmas, and that divide encourages seesaw trading, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
"We are not reading too much into" Tuesday's gains, he added. "We are still not seeing enough of an adjustment in
the short term temperature views to sustain a rally much above this week's $3.94 highs."
January and February should be cold enough to lift prices, even if they are unlikely to be as extreme as last year,
said Energy Aspects, a research and consulting firm based in London. It expects gas to average $4/mmBtu in the first
three months of 2015, down 10 cents from its previous estimate.
Industrial demand also is likely to be strong in 2015, and exports to Mexico will rise from new pipelines, the group
said. With 13 gigawatts of coal-fired power also likely to close, the power sector will use more natural gas, too, it
added.
"We are now more bullish as the market has been heavily sold," the group said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.6475/mmBtu, compared with
Tuesday's range of $3.49-$3.67. Cash prices at the Transco Z6 hub in New York last traded at $3.72/mmBtu, compared with
Tuesday's range of $3.58 to $3.65.
Write to Timothy Puko at tim.puko@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>
(END) Dow Jones Newswires
December 17, 2014 09:48 ET (14:48 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121714 14:48 -- GMT
------
No comments:
Post a Comment