Barron's Blog - Warm Weather Crushes Natural Gas, Prices Fall To Nearly 17-Year Low

DJ Warm Weather Crushes Natural Gas, Prices Fall To Nearly 17-Year Low -- Barron's Blog



  By Chris Dieterich

  This blogger had a long-scheduled day off yesterday. I did a little holiday shopping and rode my bike around
Brooklyn's Prospect Park.

  The sun was still warm by late in the afternoon, and I was comfortable in shorts and T-shirt.

  The temperature peaked at 67 degrees Fahrenheit -- roughly 24 degrees higher than average December day in New York
City.

  In a nutshell, my lovely day is the very reason that U.S. natural gas prices just plunged to their lowest settlement
price in almost 17 years on Tuesday. The Wall Street Journal's Nicole Friedman reports that Tuesday's 3.8% drop for
January natural-gas futures to $1.822 a million British thermal units marks the lowest since March 24, 1999.

  Natural gas, used to heat homes and offices, has been squeezed by rising supplies and falling demand. Unusually warm
winter weather across the nation, part of the weather phenomenon known as El Nino, has sapped demand even further, just
like analysts predicted it would.

  The United States Natural Gas exchange-traded fund ( UNG) fell 5% to $7.04 in recent trading; it's down 30% over the
past month. Traders hot for leveraged products looked to the

  VelocityShares 3x Inverse Natural Gas exchange-traded note ( DGAZ), which moves triple the inverse of futures prices
every day: this ETN rose 15% on Tuesday and is up 76% so far in December.

  Be careful if you're not in already. Extreme moves such as these reverse quickly, even though temperatures are
expected to stay warm in the weeks ahead.

 More at Barron's Focus on Funds blog, http://blogs.barrons.com/focusonfunds/http://blogs.barrons.com/focusonfunds/">http://blogs.barrons.com/focusonfunds/
>

  (END) Dow Jones Newswires

  December 15, 2015 15:42 ET (20:42 GMT)

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

121515 20:42 -- GMT
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