DJ Natural Gas Rallies on Lengthy Cold Spell
By Timothy Puko
Natural gas prices rallied Wednesday afternoon on weather forecasts showing solid cold over most of the country
through the end of February.
The front-month March contract settled up 7.2 cents, or 2.6%, at $2.831 a million British thermal units on the New
York Mercantile Exchange. Prices barely moved before noon and then made steady gains.
Noon weather updates added to confidence about a severe cold snap lingering over most of the country. About half of
U.S. homes use natural gas for heat, making cold weather a top driver for demand.
Below-normal temperatures are going to cover most of the country through the first week of March, Commodity Weather
Group said. Temperatures more than 15-degrees-Fahrenheit-below normal are likely to linger from St. Louis to Buffalo
until the end of February. Similar cold in New York this week has already pushed spot prices as high as $50/mmBtu on
Wednesday.
"There is nothing through (Feb. 28 contradicting) the missive of cold dominating the U.S. from the Plains eastward,"
WeatherBELL Analytics LLC said in its noon note to clients.
Analysts, brokers and traders are expecting that gas inventories last week shrunk by 40% less than they usually do
for this time of year. The U.S. Energy Information Administration has its weekly storage update scheduled for Thursday
at 10:30 a.m., and it is likely to report that storage levels fell by 108 billion cubic feet during the week ended Feb.
13, according to the average forecast of 17 analysts and traders surveyed by The Wall Street Journal. The average draw
on storage for that week of the year is 180 bcf.
A 108-bcf addition would put stockpiles at 2.2 trillion cubic feet, 46% above levels from a year ago and 2.9% above
the five-year average for the same week.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
February 18, 2015 15:04 ET (20:04 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
021815 20:04 -- GMT
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