Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Holds Steady on Cold Weather Forecasts


   By Timothy Puko


  Natural gas prices are holding near unchanged as cold forecasts stretch into March, raising expectations for winter
heating demand and supporting a well-supplied market.

  Natural gas for March delivery is down 0.7 cent, or 0.2%, at $2.872 a million British thermal units on the New York
Mercantile Exchange. The more actively traded April contract is up 0.8 cent, or 0.3%, at $2.885/mmBtu. March options
expire at close and the futures contract expires at Wednesday's close.

  Weather forecasts are showing patches of extreme cold for the rest of the month, and most of the country still
feeling far-below-normal temperatures through the first week of March. Half of U.S. homes use natural gas for heat, so
the cold is raising expectations for the demand.

  However, prices for the year are still likely to stay anchored at around $3/mmBtu, and could even drop in the short
term, Morgan Stanley said in a note Tuesday. Stockpiles, which recently surpassed their five-year average levels, are
just too healthy for traders to strongly bid up prices, analysts said.

  "The market would tend to want to take this thing lower, but the market's been saved...by the relative strength in
the weather forecast," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "I don't think
the market is capable of blasting its way to $3.50 even with the weather on our hands."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.14/mmBtu, compared with Monday's
range of $3.15-$3.25. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $10.25-$19.00/mmBtu,
compared with Monday's range of $22.00 to $28.00.


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


Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>

  (END) Dow Jones Newswires

  February 24, 2015 09:33 ET (14:33 GMT)

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

022415 14:33 -- GMT
------