DJ Natural Gas Slips on Weather Outlook
By Nicole Friedman
NEW YORK--Natural gas futures dropped Monday on continued expectations for weak demand, as warmer-than-normal weather
is expected to persist.
Natural gas futures recently fell 5.8 cents, or 2.5%, to $2.263 a million British thermal units on the New York
Mercantile Exchange.
Moderate temperatures at this time of year reduce demand for natural gas as an indoor-heating fuel. Above-normal
weather is expected to continue in the next 11 to 15 days.
Current weather forecasts are calling for "about 75 to 80% of the U.S. to experience above-normal temperatures
thought the middle of November," which is "decidedly bearish for nat gas heating-related demand," said Dominick
Chirichella, analyst at the Energy Management Institute.
Prices could fall further as mild weather persists, said Andy Weissman, chief executive of EBW AnalyticsGroup, in a
note.
"With available storage rapidly diminishing and space heating demand potentially declining week-over-week, cash
prices are likely to decline further," Mr. Weissman said. However, he added, "space heating demand will start to rise
by mid-November, slowing the decline."
Production remains robust, even as companies have cut spending, as drilling has gotten more efficient. Natural gas
production rose to a new record high in August, the Energy Information Administration said Friday.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $1.915/mmBtu, compared with Friday's
range of $1.87-$2.05. Cash prices at the Transco Z6 hub in New York last traded at $1.50/mmBtu, compared with Friday's
range of $1.25-$1.75.
Write to Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
November 02, 2015 10:37 ET (15:37 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
110215 15:37 -- GMT
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