Dow Jones - Natural Gas Losing Again On Moderating Weather Forecasts

DJ Natural Gas Losing Again on Moderating Weather Forecasts


   By Timothy Puko


  Natural gas prices are inching down Friday as optimism dims for weather to help resolve the market's oversupply.

  Natural gas for July delivery fell 0.4 cents, or 0.1%, to $2.773 a million British thermal units on the New York
Mercantile Exchange.

  Weather forecasts are calling for cooler temperatures than previously expected across the eastern half of the country
starting next week. Without hot weather and a stronger demand for air conditioning, traders will expect softer demand
for gas-fired power.

  Prices had gone on a run earlier this week largely based on weather. Forecasts for a hot June spurred hopes for
demand, and a tropical storm that hit Texas has some worried that rains, wind and flooding could threaten wells and
processing plants in the region.

  Instead, production in the region dropped only about 2.4% from last week, according to data provider PointLogic
Energy. Analysts also expect that the rains will damp demand in large parts of the country as the storm system pushes
north.

  "We seem to have gotten by that little heat bump," said Gene McGillian, an analyst at Tradition Energy. "Without
demand to counterbalance the amount of gas we're seeing, rallies are unsustainable."

  Simmons & Co. International said Friday that both production cuts and demand growth are necessary to raise prices to
within their 2015 forecast of $3.00/mmBtu to $3.25/mmBtu. It is holding that forecast for now, but with a warning.

  "We ... recognize that reaching the upper end of the range is growing increasingly difficult," the bank said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.81/mmBtu, compared with Thursday's
range of $2.84-$2.87. Cash prices at the Transco in New York traded in a bid-ask range of $2.65/mmBtu to $2.75/mmBtu,
compared with Thursday's range of $2.70 to $2.90.


  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

  June 19, 2015 10:05 ET (14:05 GMT)

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

061915 14:05 -- GMT
------