Dow Jones Natural Gas - Prices Slide As Market Looks Beyond Northeastern Storm

DJ Natural Gas Slides as Market Looks Beyond Northeastern Storm

By Christian Berthelsen

     Natural gas futures fell more than 3% Monday despite the approach of a massive northeastern storm, as forecasts
for early February point to warmer weather, damping expectations for gas-fired heating demand.

     The Northeast was expected to be pounded with a storm that could dump as much as three feet of snow Monday night
and Tuesday, but the effects were expected to be short-lived. In the longer term, forecasts were trending warmer into
February, with above-normal temperatures spreading over much of the western U.S. and below-normal temperatures receding
in the Northeast in the first week of the month.

     "Only the Northeast is set to see above-normal heating demand for the next seven days, with heating demand for the
rest of the U.S. below normal," research consultancy Schneider Electric said in a note. "Combine this with ongoing
rampant domestic production, and (natural gas) remains unflustered by snow storms."

     Natural gas for February delivery was down 11.5 cents, or 3.9%, at $2.8710 a million British thermal units on the
New York Mercantile Exchange.

     Temperatures have been solidly cold so far this winter, but robust domestic gas production has helped the U.S.
recover from extraordinary supply drawdowns brought on by last year's brutal winter and kept the U.S. adequately
supplied. There were 2.6 trillion cubic feet of natural gas in storage according to official U.S. data last week, 8.2%
above year-ago levels but 5.5% below average for this time of year.

     In the physical market, cash prices for next-day delivery of natural gas at the benchmark Henry Hub in Louisiana
last traded at $2.92 a million Btus, compared with Friday's range of $2.90-$2.955. Physical gas at the Transco Z6 hub
in New York traded in a bid-offer range of $7.25-$20.00, compared with Friday's range of $3.23-$3.28.

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


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  (END) Dow Jones Newswires

  January 26, 2015 09:50 ET (14:50 GMT)

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012615 14:50 -- GMT
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