Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Sinks on Warmer Weather


   By Nicole Friedman


  NEW YORK--Natural-gas prices slid Monday as temperatures warmed up, reducing demand for the heating fuel.

  Futures gained 3.8% last week as frigid weather continued into the first week of March, following the coldest
February in about 30 years. About half of U.S. households use natural gas to heat their homes, so freezing weather
boosts natural-gas consumption.

  But temperatures warmed up over the weekend in the Northeast, which is a key natural-gas-consuming region.

  Front-month April futures recently fell 13.5 cents, or 4.8%, to $2.704 a million British thermal units on the New
York Mercantile Exchange.

  "As if almost on cue, as the warmer weather hits the Northeast, natural gas has dipped lower," said Frank Clements,
co-owner of Meridian Energy Brokers Inc., in a note.

  Natural-gas inventories have fallen by large amounts in recent weeks due to strong consumption, but traders expect
those withdrawals to shrink in the coming weeks.

  "This week's emerging springlike weather will usher in the end of the winter withdrawal season," said Teri Viswanath,
director of commodity strategy for natural gas at BNP Paribas SA, in a note. The withdrawal season typically lasts from
November to April.

  "Sustained natural-gas price recovery appears to be months away," Ms. Viswanath said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.75/mmBtu, compared with Friday's
range of $2.845-$2.95. Cash prices at the Transco Z6 in New York traded at $2.62/mmBtu, compared with Friday's range of
$2.96-$3.75.


  Write to Nicole Friedman at nicole.friedman@wsj.com


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  (END) Dow Jones Newswires

  March 09, 2015 09:24 ET (13:24 GMT)

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

030915 13:24 -- GMT
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