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Natural Gas Slides as Demand Jump Fails to Materialize
Hopes fade for a bout of cold weather
By CHRISTIAN BERTHELSEN
Updated Oct. 21, 2015 4:08 p.m. ET
http://www.wsj.com/articles/natural-gas-slides-as-demand-jump-fails-to-materialize-1445438792
Natural gas futures fell sharply Wednesday as hopes faded for a bout of cold fall weather, driving prices to their lowest levels in more than three years as investors abandoned expectations of a market recovery.

Natural gas futures for November delivery settled down 7.2 cents, or 2.9%, at $2.4040 a million British thermal units on the New York Mercantile Exchange, their lowest settlement since June 13, 2012.

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.

“Short-term temperature views are not offering much in the way of price support,” research consultancy Ritterbusch and Associates said in a note.

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 [e-mail]