Dow Jones Natural Gas - Morning Natural Gas Commentary

DJ Natural Gas Inches Up as Weather Forecasts Cool



  By Timothy Puko


  Natural gas prices were inching up on Monday as weather forecasts show slightly cooler-than-normal weather for later
this month.

  Natural gas for March delivery was up 1.2 cents, or 0.5%, at $2.523 a million British thermal units on the New York
Mercantile Exchange. A day of gains would end a three-session losing streak that has taken the gas market to its lowest
point since June 2012.

  Several forecasters are predicting slightly below-normal temperatures starting next week. Cold weather increases
demand for natural gas, as about half of all U.S. homes use natural gas for heat.

  Low prices are also likely drawing in more gas consumption from power plants, analysts have said.

  "Remember...the cure for low prices is low prices," Tom Saal, a broker at INTL FCStone Latin America in Miami, said
in a note to clients. "Buyer's-be-ready."

  However, several analysts said on Monday not to expect a major turnaround soon. A cold late-April adds only marginal
demand, said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. It can't create a major
increase in demand comparable to what comes from unseasonably cold weather in the winter.

  There are so many high-producing gas wells in the Appalachian basin that production is likely to keep increasing and
sending prices to even lower points into the summer, Canaccord Genuity Group Inc. said in a note to clients on Monday.

  Gas producers are also drilling wells but waiting to complete them, which means there are wells ready to come online
that will help keep prices from rebounding until at least late this year, the bank said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.565/mmBtu, compared with
Thursday's range of $2.52-$2.59. There was no trading on the Good Friday holiday. Cash prices at the Transco Z6 hub in
New York last traded at $2.00/mmBtu, compared with Thursday's range of $1.65 to $1.90.


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


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  (END) Dow Jones Newswires

  April 13, 2015 10:02 ET (14:02 GMT)

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

041315 14:02 -- GMT
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