DJ Natural Gas Gets Boost on Hopes for Winter
By Timothy Puko
Natural gas prices are rising as traders continue to hope for a surge of winter demand despite largely mild weather
forecasts.
Prices for the front-month December contract gained 4.4 cents, or 1.9%, to $2.344 a million British thermal units on
the New York Mercantile Exchange. It has rebounded far enough to cancel out most of Monday's losses, which had been the
largest for one session in the past two weeks.
Weather forecasts still show widespread warmth across the country, but have pulled back slightly from earlier
forecasts, suggesting heating demand should be slightly stronger than previously expected. Half of U.S. homes use
natural gas for heat, and traders have shown a tendency to bid up prices in anticipation of winter, even if forecasts
are relatively mild.
"The sentiment is bullish. They say 'Watch natural gas; it's that time of year,'" said Bob Yawger, director of the
futures division at Mizuho Securities USA Inc. "It's hard to sell the market down to" below $2/mmBtu when a surge of
winter demand is on the way.
Mr. Yawger and others, however, warned that the market still appears oversupplied. Stockpiles likely set a new record
high at the end of last week, and many are expecting mild temperatures and tepid heating demand throughout the winter
because of the weather phenomenon El Nino.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.125/mmBtu, compared with Monday's
range of $2.08-$2.16. Cash prices at the Transco Z6 hub in New York last traded at $1.57/mmBtu, compared with Monday's
range of $1.69 to $1.85.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
November 10, 2015 11:15 ET (16:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
111015 16:15 -- GMT
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