DJ Natural-Gas Prices Rising on Winter's 'Last Gasp'
By Timothy Puko
Natural-gas prices made their biggest gains Wednesday in more than two weeks as weather forecasts show a cooler start
to spring.
Natural gas for April delivery settled up 9.2 cents, or 3.4%, at $2.824 a million British thermal units on the New
York Mercantile Exchange. It is the largest percentage gain since Feb. 20, and two winning sessions have now nearly
cancelled out massive losses from Monday.
Short sellers -- investors who bet prices would fall -- likely bought back in to close out those trades, an analyst
and trader said. Colder-than-normal weather now forecast for the last week of March and into April could be limiting a
further collapse in prices, said Gene McGillian, an analyst at Tradition Energy.
"We have maybe one last gasp of winter," he said.
Traders may also think that heavy withdrawals from stockpiles could buoy the market, Mr. McGillian added. Cold
weather has been so severe that a rush of late winter heating demand likely drained 191 billion cubic feet out of
storage last week, according to The Wall Street Journal survey of 22 analysts. That would be 65% larger than average
drain for that week of the year, according to data from the U.S. Energy Information Administration.
The agency plans to release its official data on storage levels Thursday at 10:30 a.m. EDT. Last week's 228-bcf drain
set a new high for a week in the second half of February.
Commodity Weather Group LLC changed its forecast Wednesday to show more severe cold covering big heating markets in
the Northeast. About half of U.S. homes use natural gas for heat, making cold weather one of the biggest drivers for
demand.
Those changes come on top of long-term weather updates from Tuesday that predict a chilly April. Both Commodity
Weather Group and WeatherBELL Analytics LLC in New York expect below-normal temperatures for large parts of the
country.
WeatherBELL predicts unseasonably cool weather for the interior U.S., averaging as much as 3 degrees below normal in
a patch from Denver to Oklahoma City. Commodity Weather Group expects below-normal temperatures in the states on the
East and Gulf coasts. The amount of heating degree days, which measure weather-related demand for natural gas, will be
up 4% from a year ago, it said.
Too many people sold on warm forecast revisions Monday and have to undo those bets as below- and far below-normal
temperatures raise the potential for strong demand, said John Woods, president of JJ Woods Associates and a Nymex
trader.
The selling "was a tad overdone," Mr. Woods said.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
March 11, 2015 15:00 ET (19:00 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
031115 19:00 -- GMT
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