Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Prices Rising on Extreme Cold and Strong Demand


   By Timothy Puko


  Natural gas is rallying as a spate of freezing and even single-digit temperatures is likely to support strong demand
for heating fuel this week from Denver to Boston.

  Natural gas for April delivery is up 5.2 cents, or 1.9%, at $2.764 a million British thermal units on the New York
Mercantile Exchange. Gas is on pace for its first back-to-back gains in nearly two weeks.

  Cities including Denver, Chicago and Philadelphia are likely to see lows in the single digits this week, according to
MDA Weather Services in Maryland. Large parts of the country will see daily average temperatures of more than
20-degrees-Fahrenheit-below normal for early March. About half of U.S. homes use natural gas for heat, making cold
weather one of the biggest drivers for demand.

  "I don't think anyone anticipated this kind of weather for the beginning of March," said John Woods, president of JJ
Woods Associates and a Nymex trader.

  The late surge in winter heating demand is draining stockpiles at a similar pace as last year's historically cold
winter, said Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York. BNP has joined several banks now
in lowering its forecast for the amount of gas in storage at the end of the winter. It expects that number to be less
than 1.5 trillion cubic feet, down from earlier expectations of 1.7 tcf. That should quell any concerns that storage
could fill up and collapse prices later this year, Ms. Viswanath said in a note.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.28/mmBtu, compared with Tuesday's
range of $2.80-$3.02. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of $8.50/mmBtu to
$15.00/mmBtu, compared with Tuesday's range of $3.75 to $3.90.


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


Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>

  (END) Dow Jones Newswires

  March 04, 2015 09:39 ET (14:39 GMT)

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

030415 14:39 -- GMT
------