DJ Natural Gas Retreats on Milder Weather Forecasts
By Timothy Puko
Natural gas prices slipped to nearly a three-month low Wednesday as traders focused on the chance that comfortable
weather is leading to large surpluses.
The front-month October contract settled down 5.4 cents, or 2%, at $2.648 a million British thermal units on the New
York Mercantile Exchange. Prices closed just below a 28-cent range in which they had settled every session since June
8.
Consumption of gas-powered electricity in the summer often follows the demand for air-conditioning. The most recent
forecasts from Commodity Weather Group LLC and MDA Weather Services show below-normal temperatures spreading into the
Chicago region and across a large chunk of the Midwest, a bad sign for cooling demand, analysts said.
Expectations for large storage additions are also putting downward pressure on prices, energy-consulting firm Gelber
& Associates said in a note. The U.S. Energy Information Administration gives its weekly update on storage levels
Thursday at 10:30 a.m. EDT and the widespread expectation is the data will show a large surplus from tepid
cooling-related demand and near-record production, the note said.
It is a bad sign that 90-degree heat over large markets for demand, including New York, hasn't sent prices higher in
recent days, Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note.
"The inability of this market to piece together a meaningful price advance amidst some unusually hot temperature
trends this week is suggestive of a market destined for some additional price consolidation," Mr. Ritterbusch said.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
September 02, 2015 15:03 ET (19:03 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
090215 19:03 -- GMT
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