Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Prices Rising With Colder-Than-Normal Weather on Way


   By Timothy Puko


  Natural gas is rallying Wednesday, as weather forecasts show a cooler start to spring.

  Natural gas for April delivery is up 4.8 cents, or 1.8%, at $2.78 a million British thermal units on the New York
Mercantile Exchange. This would be the second-straight session of gains after massive losses on Monday.

  Short sellers--people who bet prices would fall--are likely buying back in to close out those trades, said John
Woods, president of JJ Woods Associates and a Nymex trader. Too many people had sold off on warm forecast revisions
Monday and have to undo those bets as below- and far-below-normal temperatures enter the forecast starting late next
week, he added.

  "I think it's a tad overdone," Mr. Woods said.

  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 predicted 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

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.7925/mmBtu, compared with
Tuesday's range of $2.69-$2.765. Cash prices at the Transco Z6 hub in New York last traded at $2.80/mmBtu, compared
with Tuesday's range of $2.10 to $2.75.


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


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  (END) Dow Jones Newswires

  March 11, 2015 09:28 ET (13:28 GMT)

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

031115 13:28 -- GMT
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