Dow Jones Natural Gas - Market Retreats On Uncertain Weather

DJ Natural Gas Retreats Slightly on Uncertain Weather


   By Timothy Puko


  Natural gas prices are in slight decline and have flipped-flopped around unchanged Wednesday as weather reports
disagree about how severe the cold will be in mid-February.

  Natural gas for February delivery is down 1.7 cents, or 0.6%, at $2.737 a million British thermal units on the New
York Mercantile Exchange. It puts the market on pace for losses in five of six sessions, bringing a quick end to a
rally that took off after weather updates at noon on Tuesday.

  Some of Wednesday's forecasts still show abnormally cold weather covering the eastern half of the country in
mid-February, with severe cold in the Northeast. But others are predicting a more moderate cold spell, leaving traders
unconvinced, Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in a note.

  "We do have very oversold conditions, but from the same standpoint, we're now so far into February ... that natural
gas bulls are running out of winter," said Stephen Schork, editor of energy trade publication the Schork Report. "As
each day goes, the odds of a severe winter event pushing up prices diminishes significantly."

  Half of U.S. homes use natural gas for heat, and severe winter cold can push demand for gas to record levels. But
supply has been so strong in the past year that any buyers now are probably protecting themselves, not necessarily
betting that demand will outpace supply, Mr. Schork and other analysts said.

  Money managers have been betting most on falling prices, and many will unwind those bets as a precaution if weather
forecasts show that severe cold could ramp up demand, the analysts said. Those trades are closed out by buying futures
to cover the position, which can feed into a price rally when it is done in large numbers at the same time.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.7350/mmBtu, compared with
Tuesday's range of $2.655-$2.70. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $6.50/mmBtu
to $18.00/mmBtu, compared with Tuesday's range of $3.61 to $3.85.


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


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  (END) Dow Jones Newswires

  February 04, 2015 09:18 ET (14:18 GMT)

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

020415 14:18 -- GMT
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