DJ Natural Gas Inches Lower Tuesday, Posts Quarterly Loss
By Timothy Puko
Natural-gas prices ticked slightly lower Tuesday, as traders eyed spring weather and lower demand.
Futures for May delivery settled down 0.4 cent, or 0.2%, at $2.64 a million British thermal units on the New York
Mercantile Exchange. That put gas back within 5 cents of the 7-week low it set on Friday.
Natural gas lost 8.6% in the first quarter, marking its third consecutive quarterly loss. Natural gas prices have
fallen 41% in the past three quarters, the biggest such losing streak in 3 years.
Prices stayed within a 7-cent range in what one analyst called a "spooky" quiet session. Only about 50,000 contracts
traded during floor hours, the lowest number since July 30, 2010. About three times that traded in total volume -
including electronic trading hours - through 3 p.m. EDT, which would still make this one of the lightest sessions of
the past year.
Trading often slows in the spring as winter weather recedes into the past and takes away the biggest driver of
demand-heating. Day-to-day changes in the weather are becoming less important, and the biggest driver is likely to
become the amount of gas consumed by power plants, said Aaron Calder, senior market analyst at energy-consulting firm
Gelber & Associates in Houston.
Power plants are closing coal-fired boilers and adding gas-fired generation, especially as gas prices fall. How
quickly that trend ramps up this spring will likely dictate where prices go from here, but traders are still waiting
for data to judge that trend, Mr. Calder said.
"Folks are also cautious," said Campbell Faulkner, chief data analyst at broker OTC Global Holdings. "It is just very
spooky...and nothing is trading."
Production has also hovered near record highs for about a year. There is widespread belief that the market is
oversupplied, but traders have little room to profit from betting on falling prices because they have already fallen so
far, said Tom Saal, a broker at INTL FCStone Latin America in Miami.
"The market's going sideways here," he said. "There's just no aggressive selling."
--Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
March 31, 2015 16:03 ET (20:03 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
033115 20:03 -- GMT
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