Dow Jones - Natural Gas Prices Snap Six-Session Losing Streak

DJ Natural Gas Prices Snap Six-Session Losing Streak


   By Nicole Friedman


  NEW YORK--Natural-gas prices gained on Friday, as traders who had bet on lower prices took profits following a
six-session losing streak.

  Futures prices had tumbled 16% in six sessions, as weather forecasts called for above-average temperatures this
month, lowering expectations for natural-gas demand. About half of U.S. households use natural gas as their primary
heating fuel.

  In the latest sign of tepid demand, natural-gas supplies fell much less than projected last week, as heating demand
undershot expectations. Stockpiles fell just 22 billion cubic feet in the week ended Nov. 28, according to the U.S.
Energy Information Administration, less than the 43-bcf drop that analysts and traders had expected.

  However, prices bounced higher on Friday, as traders who had bet on lower prices closed out positions ahead of the
weekend, in case temperature forecasts turn colder. "Sellers become more conservative the lower we go," said Don
Morton, senior vice president at Herbert J. Sims & Co. "There's more winter left."

  On Friday, natural gas for January delivery settled up 15.3 cents, or 4.2%, at $3.802 a million British thermal units
on the New York Mercantile Exchange.

  Prices posted a 7% loss for the week.

  Despite current above-normal temperatures, the coldest days of winter can come later in the season, said Teri
Viswanath, director of commodity strategy for natural gas at BNP Paribas SA. Prices had hovered around $4/mmBtu in
December 2013, but unusually cold weather in January and February sent prices spiking above $6/mmBtu.

  "If we come in here on Monday and the temperatures still call for above normal, I think we'll probably continue to go
lower," said Tom Saal, a broker at INTL FCStone. "The price will turn on the next forecasts."

  Last year's frigid winter depleted natural-gas supplies, and market watchers worried that producers wouldn't be able
to refill storage caverns ahead of the current heating season. But natural-gas production was much stronger than
anticipated, and inventories now stand just 9.8% below the five-year average for this time of year.

  "There's so much gas coming out of the ground," said Bob Yawger, director of the futures division at Mizuho
Securities USA Inc. "I believe it will continue to put pressure on the market."

FUTURES              SETTLEMENT        NET CHANGE
Nymex January        $3.802            +15.3c
Nymex February       $3.823            +16.2c
Nymex March          $3.774            +16.1c

CASH HUB             RANGE        PREVIOUS SESSION
El Paso Perm         $3.15-$3.24       $3.39-$3.43
El Paso SJ           $3.17-$3.26       $3.38-$3.45
Henry Hub            $3.40-$3.48       $3.47-$3.565
Katy                 $3.24-$3.40       $3.2750-$3.46
SoCal                $3.33-$3.60       $3.50-$3.65
Tex East M3          $3.15-$3.27       $3.06-$3.25
Transco 65           $3.35-$3.45       $3.385-$3.48
Transco Z6           $3.50-$3.61       $3.52-$3.55
Waha                 $3.17-$3.25       $3.39-$3.40


  Write to Nicole Friedman at nicole.friedman@wsj.com


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  (END) Dow Jones Newswires

  December 05, 2014 15:21 ET (20:21 GMT)

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

120514 20:21 -- GMT
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