DJ Natural Gas Futures Slip on Warmer Weather Forecasts
By Christian Berthelsen
Natural gas futures edged down Monday as U.S. weather forecasts through mid-March began to warm up, rolling back
expectations for gas-fired heating demand in the waning days of winter.
Prices for the front-month April contract were down 2 cents, or 0.7%, at $2.7140 a million British thermal units.
Despite being in the middle of peak demand season, the natural gas market has fallen more than 40% since late November
as surging shale gas production has more than accommodated strong demand during the icy winter.
After an arctic blast covering much of the U.S. through Friday, newly revised forecasts show temperature outlooks
beginning to soften, with milder-than-expected cold early next week and above-normal temperatures starting to show up
in mid-March.
Stockpiles of natural gas stood at 1.94 trillion cubic feet as of the most recent data on Feb. 20, 42% above year-ago
levels and just 1.5% below average for this time of year. Despite a markedly cold February and expectations for at
least two more large draws on supplies in the coming weeks, production is so strong that inventories are expected to
return to a surplus in the second quarter, according to research consultancy Ritterbusch and Associates.
"Production remains the critical component of our bearish viewpoints," the firm said in a note.
Money managers such as hedge funds are overall bearish on the market, with the number of bets that the market will
fall outnumbering those that they will rise, according to data released Friday by the Commodity Futures Trading
Commission.
In the physical gas market, cash prices for next-day delivery at the benchmark Henry Hub in Louisiana last traded at
$2.76 a million Btus, compared with Friday's range of $2.68-$2.85. Prices at the Transco Z6 hub in New York traded in a
bid-offer range of $2.75-$7.50, compared with Friday's range of $3.00-$3.55.
Write to Christian Berthelsen at Christian.Berthelsen@wsj.com
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(END) Dow Jones Newswires
March 02, 2015 09:14 ET (14:14 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
030215 14:14 -- GMT
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