DJ Natural Gas Extends Slide as Warmer Weather Looms
By Christian Berthelsen
Natural gas prices slipped Friday as warmer temperatures crept into the forecasts with the onset of spring, reducing
expectations for late-season heating demand that could support the market.
The front-month April natural gas contract was down 3.9 cents, or 1.5%, at $2.6330 a million British thermal units on
the New York Mercantile Exchange, on pace for a third-consecutive losing session. The market is bumping along at its
lowest levels of the year as the U.S. enters a so-called shoulder season between winter and spring, and demand for
gas-fired heating falls away. The April contract is set to expire with the close of trading Friday.
There were no major revisions to temperature outlooks in the coming days and weeks, but there was a slight warming
trend, with above-normal temperatures growing over much of the Southwest during early April and the lingering cool over
the Northeast beginning to fade.
"The market is sending off some strong overtures that the weather factor is quickly dissipating as a supportive
market force," research consultancy Ritterbusch and Associates said in a note.
Meanwhile, gas production from domestic shale formations remains high and U.S. stockpiles of natural gas inventories
are growing. The U.S. Energy Information Administration said Thursday that inventories rose 12 billion cubic feet in
the week ended March 20; it was the first increase of the year after a season of drawdowns to meet heating demand, and
came a week or two earlier than what analysts normally expect.
The supply growth brought overall inventories to 1.5 trillion cubic feet, 64% higher than year-ago levels that were
severely depleted by last year's harsh winter, and 12% below average for this time of year.
In the market for physical natural gas, prices for next-day delivery of gas at the benchmark Henry Hub in Louisiana
last traded at $2.6150 a million BTUs, within Thursday's range of $2.60-$2.7575. At the Transco Z6 hub in New York,
physical gas traded in a bid-offer range of $2.60-$2.65, below Thursday's range of $2.68-$2.75.
Write to Christian Berthelsen at christian.berthelsen@wsj.com
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(END) Dow Jones Newswires
March 27, 2015 09:58 ET (13:58 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
032715 13:58 -- GMT
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