DJ Natural Gas Gets Bump on Summer Speculation
By Timothy Puko
Natural gas prices are getting a boost as traders start to anticipate summer demand.
Natural gas for May delivery rose 1.4 cents, or 0.6%, at $2.545 a million British thermal units on the New York
Mercantile Exchange. Trading has stayed within a 25-cent range for nearly a month.
Prices have been falling since November as near-record production has kept the market oversupplied. But the tumble
has ground almost to halt since late March with few people left to sell and some traders starting to anticipate the
seasonal rise in demand and prices that usually comes in the summer.
Bets on falling prices outnumber bets on rising prices by more than three to two, according to data from U.S.
regulators. Prices have already fallen so far, and the trade for lower prices has become so crowded, that there is
little reward left to jump in and sell now, analysts and traders have said.
"If you're just stepping into the market, you're crazy if you get short at $2.50," said John Woods, president of JJ
Woods Associates and a Nymex trader. "Your parameters are essentially set."
A bet on rising prices is starting to have potential for bigger gains, he said. Rising demand for electricity to run
air conditioners usually sends gas demand and prices higher in the summer. Mr. Woods said he is getting ready to place
trades benefiting from that, expecting prices will soon head toward $2.80/mmBtu.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.55/mmBtu, compared with Thursday's
range of $2.545-$2.57. Cash prices at the Transco in New York traded in a bid-ask range of $2.30/mmBtu to $2.63/mmBtu,
compared with Thursday's range of $2.565 to $2.59.
Write to Timothy Puko at tim.puko@wsj.com
-30-
(MORE TO FOLLOW) Dow Jones Newswires
April 24, 2015 09:40 ET (13:40 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
042415 13:40 -- GMT
------
No comments:
Post a Comment