Dow Jones Natural Gas - Market Bounces As Weather Forecast Grows Slightly Colder

DJ Natural Gas Bounces as Weather Forecast Grows Slightly Colder


   By Timothy Puko


  Natural gas prices are rebounding slightly Tuesday as traders appear unwilling to keep selling at prices below $2.80
with two months of winter still to go.

  Natural gas for February delivery is 6.5 cents, or 2.3% higher, at $2.86 a million British thermal units on the New
York Mercantile Exchange. Prices have now bounced five times this month, and each time they have dropped near
$2.80/mmBtu.

  Weather forecasts encouraged Tuesday's buying, analysts and a broker said. Half of U.S. homes use natural gas heat,
and above-normal temperatures throughout December have cut demand, taking down the market at a time it usually peaks.
Next week's forecasts, while they are warmer-than normal, cooled in overnight updates, raising expectations for gas
heating demand.

  With more than two months left for official winter heating season, traders have to be aware that weather can still
turn severe and drive a spike in demand, Dominick Chirichella, analyst at the Energy Management Institute, said in a
note.

  "It is still cold and it doesn't look like people want to step in and go all-out short at this moment because there
is still some time left in winter," said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York.

  Both Mr. Chirichella and Mr. Clements warned that there are still ample supplies and bearish signals for gas in the
weeks to come. Natural gas--a market that draws a lot of technical traders and feeds on momentum--nearly always plunges
to $2.60/mmBtu within eight days of any break below $2.80, as it did on Monday for the first time in two years, Mr.
Clements said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.9275/mmBtu, compared with Monday's
range of $2.88-$2.915. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $6.00-$9.50/mmBtu,
compared with Monday's range of $9.50 to $13.00.


  Write to Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  January 13, 2015 09:54 ET (14:54 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

011315 14:54 -- GMT
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