DJ Natural Gas Retreats on Milder Weather Forecasts
By Timothy Puko
Natural gas prices slipped on Wednesday as weather forecasts show a front of milder-than-normal weather spreading
throughout the Midwest at the start of next week, lowering expectations for demand.
Prices for the front-month October contract fell 4.7 cents, or 1.7%, to $2.655 a million British thermal units on the
New York Mercantile Exchange. Prices are hovering near the bottom of a 33-cent range they have traded in for nearly
three months.
Consumption of gas-powered electricity in the summer often follows the demand for air-conditioning units. 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.
It is also a bad sign for gas futures that they haven't surged in recent days even as 90-degree heat lingers over
large markets for demand, including New York, Jim Ritterbusch, president of energy-advisory firm Ritterbusch &
Associates, said in a note. Production is still at a near-record pace despite some small declines.
"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.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.81/mmBtu, compared with Tuesday's
range of $2.725-$2.77. Cash prices at the Transco Z6 hub in New York last traded at $2.74/mmBtu, compared with
Tuesday's range of $2.86-$2.92.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
September 02, 2015 10:28 ET (14:28 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
090215 14:28 -- GMT
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