DJ Natural Gas Slips on Expectations for Big Surpluses
By Timothy Puko
Natural gas prices slipped Monday, on pace to end a four-session rally, as analysts expect comfortable spring weather
to lead to large surpluses.
Prices for the front-month June contract declined 1.4 cents, or 0.5%, to $2.762 a million British thermal units on
the New York Mercantile Exchange.
Most gas consumption goes to heat homes in the winter or run power plants in the summer when they feed air
conditioners. That makes weather the biggest variable for gas prices, which often plunge as comfortable spring weather
kills demand.
The newest weather forecasts show far above-average temperatures coming in the east, especially the Mid-Atlantic
region. While meteorologists said it could lead to more cooling demand than previously expected, gas market analysts
expect the weather will still be comfortable enough and production high enough to result in big surpluses for several
weeks to come.
"I've got my T-shirt on in Northern Illinois and that doesn't always happen in the first week of May," said Jim
Ritterbusch, president of energy-advisory firm Ritterbusch & Associates.
Speculative traders and traders who take positions based on momentum and charts are still strongly in favor of bets
on falling prices, analysts said. The monthly highs have all been lower each month since January, giving more momentum
for falling prices, Mr. Ritterbusch said.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.73/mmBtu, compared with Friday's
range of $2.66-$2.6825. Cash prices at the Transco Z6 hub in New York last traded at $2.78/mmBtu, compared with
Friday's range of $2.50 to $2.71.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
May 04, 2015 10:23 ET (14:23 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
050415 14:23 -- GMT
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