Dow Jones - Natural Gas Sinks On Cooler Weather Forecasts

DJ Natural Gas Sinks on Cooler Weather Forecasts


   By Timothy Puko


  Natural gas sank as soon as electronic trading opened Sunday evening and has continued to slide Monday morning on
signs of cooler weather and softer-than-expected demand on the way.

  Prices for the front-month July contract fell 9.6 cents, or 3.4%, to $2.72 a million British thermal units on the New
York Mercantile Exchange. The fall is the market's biggest-one day percentage decline in nearly four weeks and puts gas
at nearly a two-week intraday low.

  Weather updates after the weekend are showing cool temperatures moving into the Midwest by Thursday and then pushing
across the rest of the eastern states. Chicago is likely see high temperatures of four- to seven-degrees Fahrenheit
below normal, and then the weekend will bring even cooler temperatures, eight- to nine-degrees below normal for New
York and Boston, according to MDA Weather Services in Maryland.

  Without hot weather, people are less likely to use their air conditioners and drive demand for gas-fired power. Gas
markets are already oversupplied because of the U.S. drilling boom and many have said the summer must be hot and power
demand must be high to drive prices up from near three-year lows.

  "When those weather reports came out, everybody who's (betting on higher prices), they're going to run for the
doors," said Scott Gettleman, an independent trader in New York. He added that prices may rebound at some point Monday,
but that would just be a good time to bet on another fall. "You really have to be patient."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.7575/mmBtu, compared with Friday's
range of $2.78-$2.82. Cash prices at the Transco Z6 hub in New York last traded at $3.00/mmBtu, compared with Friday's
range of $2.75 to $2.77.


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


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  (END) Dow Jones Newswires

  June 22, 2015 09:31 ET (13:31 GMT)

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

062215 13:31 -- GMT