DJ Natural Gas Goes Up and Down on Mixed Weather Forecasts
By Timothy Puko
Natural gas gains are tapering Monday morning as volatile weather reports have divided the market.
Natural gas for January delivery is up 2.3 cents, or 0.6%, at $3.818 a million British thermal units on the New York
Mercantile Exchange. Nearly all those gains came as soon as electronic trading opened Sunday evening, with the market
drifting lower from there.
Weather forecasts have played a big role. Several are showing a burst of unseasonably cold weather spreading across
the country after Christmas and have also pulled back on predictions of unseasonably warm temperatures through the next
10 days.
Half of all U.S. homes use gas for heating, making winter the peak season for demand. Traders often bid up the price
on signs that cold weather could lead to strong heating demand.
The market had been sinking for most of the past three weeks on predictions for unseasonably warm weather and
expectations for soft demand. Most of the country is still likely to see temperatures 2- to 8-degrees-Fahrenheit above
normal this week, and that is dragging prices back down despite the early gains, analysts and a trader said.
Big price swings are often part of trading to open the week, said Scott Gettleman, an independent trader in New York.
If someone has a big order to fill, it can have an outsized influence during light trading, even more than the
fluctuating weather forecasts, he said.
"I wouldn't put a lot of stock in (the weather's influence today) because it's illiquid and anything can happen when
someone has contracts to buy," Mr. Gettleman said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.635/mmBtu, compared with Friday's
range of $3.55-$3.60. Cash prices at the Transco Z6 hub in New York last traded at $3.70/mmBtu, compared with Friday's
range of $3.60 to $3.80.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 15, 2014 09:40 ET (14:40 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
121514 14:40 -- GMT
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