DJ Natural Gas Rises on Prospects for Stronger Demand
By Timothy Puko
Natural gas closed higher, bouncing up from near seasonal lows, on prospects for stronger demand for home heating and
power plants, analysts said.
The front-month January contract settled up 8.3 cents, or 2.3%, at $3.702 a million British thermal units on the New
York Mercantile Exchange. The gains came after two days of losses that had brought Tuesday's closing price within 3
cents of the seven-week low.
Prices were low enough that power plants should start considering a switch from coal fuel to natural gas, Aaron
Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a note. That is the
primary supply-and-demand factor that has repeatedly stopped gas from falling far below $3.60/mmBtu this month, he
added.
Forecasts for 11 to 15 days out are also 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" Wednesday'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."
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
December 17, 2014 14:51 ET (19:51 GMT)
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