Dow Jones - Natural Gas Slides As Demand Jump Fails To Materialize

DJ Natural Gas Slides as Demand Jump Fails to Materialize


   By Christian Berthelsen


  Natural gas futures fell sharply Wednesday as hopes faded for a bout of cold fall weather, driving prices to a new
three-year low as investors abandoned bullish hopes.

  Natural gas futures for November delivery fell 7.8 cents or 3.1% to $3.990 a million British thermal units on the New
York Mercantile Exchange.

  Forecasts for the coming days were little changed going into Wednesday's trading session, but the lack of a stronger
development for cold weather dashed hopes for a jump in gas-fired heating demand. The market rallied through the first
half of October in the expectation that demand would increase, but forecasts are calling for above-normal temperatures
over a wide swath of the country in the coming days, and normal conditions through early November.

  "The weak fundamentals of the market continue to drive prices lower," said Gene McGillian, senior analyst at
brokerage Tradition Energy in Stamford, Conn.

  Natural gas inventories are already 4.7% above average for this time of year as of last week's data from the U.S.
Energy Information Administration, and analysts are predicting another addition to supplies in Thursday's report. Some
believe continued robust production could lead to stored inventory growth into mid-November, well past the time when
demand usually begins causing supplies to contract.

  "We expect prices to remain near their current low levels into year end," Goldman Sachs said in a research note. "We
see risks as clearly skewed to another leg lower in gas prices in coming weeks."


  Write to Christian Berthelsen at christian.berthelsen@wsj.com


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  (END) Dow Jones Newswires

  October 21, 2015 10:27 ET (14:27 GMT)

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

102115 14:27 -- GMT
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