Dow Jones Natural Gas - Prices Bounce Back After Dipping Into Bear Market

DJ Natural Gas Bounces Back After Dipping Into Bear Market



  By Christian Berthelsen


  Natural gas futures rebounded Tuesday after a 5% slide the day before that dragged the market into bear territory, as
traders took profits from bets on lower prices.

  Natural gas for January delivery was up 2 cents, or 0.6%, at $3.615 a million British thermal units on the New York
Mercantile Exchange. Futures lost more than 20 cents, or 5.4%, on Monday, and before Tuesday, the front-month contract
had fallen 20% from its recent peak less than a month ago.

  "The market continues to remain in a bearish mode as supply remains robust and warmer-than-normal weather across
major portions of the U.S. are keeping natural gas heating-related demand at a below-normal level," Energy Management
Institute analyst Dominick Chirichella said in a note.

  Analysts said Tuesday's buying was driven by traders closing out bets that the market would fall and taking profits
on the trade. Such a so-called short trade is carried out by selling futures into the market and buying them back after
prices have fallen.

  Weather forecasts remain little changed into late December, with a spate of above-normal temperatures throughout much
of the U.S. driving expectations for weak demand for natural gas to heat homes. Meanwhile, robust natural gas
production has continued, with some analysts saying the U.S. could erase its supply deficit before the end of the
month.

  In the physical market, cash prices for next-day gas delivery at the benchmark Henry Hub in Louisiana last traded at
$3.5750 a million Btus, above Monday's range of $3.43-$3.615. Cash prices at the Transco Z6 hub in New York traded in a
bid-offer range of $4.05-$4.17 a million Btus, below Monday's range of $3.65-$3.80.


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


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  (END) Dow Jones Newswires

  December 09, 2014 10:27 ET (15:27 GMT)

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

120914 15:27 -- GMT
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