Dow Jones - Natural Gas Sinks To Lowest Level Since 2002

DJ Natural Gas Sinks to Lowest Level Since 2002

By Nicole Friedman

     NEW YORK--Natural gas futures plunged Monday to their lowest levels since 2002 as warm weather continued to engulf
the nation, reducing indoor-heating demand.

     Weather forecasts released Sunday night and Monday showed "significantly warmer" weather in the next two weeks
than previously expected, according to Commodity Weather Group LLC.

     Warm weather reduces demand for natural gas, which is used as the primary heating fuel in about half of U.S.
households.

     "During the past two weeks, forecasts for December shifted strongly warmer nearly every day, cutting expected
December demand sharply," said Andy Weissman, chief executive of EBW AnalyticsGroup, in a note. "If this ultra-warm
trend continues, the potential impact on natural gas could be severe. ... To balance the market, steep further price
declines may be required."

     Futures for January delivery recently fell 9.2 cents, or 4.6%, to $1.898 a million British thermal units, the
lowest intraday level since January 2002.

     Moderate temperatures and robust production have pushed the natural-gas market into oversupply this year.
Inventories as of Dec. 4 stood 6.5% above the five-year average for this time of year, according to the Energy
Information Administration, sparking concerns that storage facilities could run out of room to hold the fuel by
mid-2016.

     Physical gas for next-day delivery at the Henry Hub in Louisiana last traded between $1.75 and $1.80/mmBtu,
compared with Friday's range of $1.73-$1.795.

     Cash prices at the Transco Z6 hub in New York last traded between $1 and $1.70/mmBtu, compared with Friday's range
of 82 cents to $1.

     Write to Nicole Friedman at nicole.friedman@wsj.com


  (END) Dow Jones Newswires

  December 14, 2015 09:38 ET (14:38 GMT)

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

121415 14:38 -- GMT
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