DJ Natural Gas Falls on Strong Production
By Timothy Puko
Natural gas prices were falling Thursday as traders stayed focused on strong production, ignoring a late peak in
winter-related demand.
Natural gas for April delivery was recently down 4.8 cents, or 1.7%, at $2.841 a million British thermal units on
the New York Mercantile Exchange. Natural gas is trading at its lowest point in a week despite demand peaking to its
highest point of the winter.
Half of U.S. homes use natural gas for heat, and February's severe cold is likely to create the largest draw from
stockpiles on record for a week in the second half of February, according to the weekly Wall Street Journal survey.
The average forecast of 20 analysts, brokers and traders is for a 241-billion-cubic-feet withdrawal from storage in
the week ended Feb. 20. The previous high for a week in the second half of February was a 176 draw for the week ended
Feb. 28, 2003.
But production grew for 11-straight months to end last year, and analysts expect growth to keep going in 2015. So
with the end of winter nearing, traders are essentially ignoring the strong demand and shrinking stockpiles, said Frank
Clements, co-owner of Meridian Energy Brokers Inc. outside New York.
"With the strong production, we're going to resume our downward trend," Mr. Clements said. "I think all the cold
weather did was delay us moving lower."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.035/mmBtu, compared with
Wednesday's range of $3.165-$3.23. Cash prices at the Transco Z6 in New York traded in a bid-ask range of $15.50/mmBtu
to $25.00/mmBtu, compared with Wednesday's range of $20.00 to $25.00.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
February 26, 2015 09:54 ET (14:54 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
022615 14:54 -- GMT
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