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Natural Gas Sells Off as Demand Picture Weakens
Investors have been heavily bearish on prospects for natural gas
By CHRISTIAN BERTHELSEN
Oct. 23, 2015 11:26 a.m. ET
http://www.wsj.com/articles/natural-gas-sells-off-as-demand-picture-weakens-1445614013
Natural gas prices slumped Friday as weather forecasts into November warmed up, rolling back hopes for an onslaught of gas-fired heating demand with the onset of cool fall temperatures.

Natural gas futures fell 5.5 cents or 2.3% to $2.3310 a million British thermal units on the New York Mercantile Exchange, on pace for its third losing session in a row. The market has been trading at its lowest levels in more than three years amid surging supplies from the boom in domestic shale production. The market has lost more than 28% since its peak early in the year.

Investors have been heavily bearish on prospects for natural gas, with more than twice as many short trades that profit when prices fall as bullish bets. U.S. data released Thursday showed domestic natural gas stockpiles now stand at more than 3.8 trillion cubic feet, 4.5% above average for this time of year.

“The market remains focused on short-term views in which generally mild temperature conditions are expected to return to the nation’s mid-section by the end of next week,” research consultancy Ritterbusch and Associates said in a note.

The warm-up in the forecasts hasn’t been drastic, but the delay in the onset of cool weather is raising concerns about weak demand at a time of rising supplies. A large swath of the country stretching from California to the Great Lakes is expected to see above-normal temperatures for this time of year over the next two weeks.

“The market remains over-supplied with the overall fundamentals still bearish,” the Energy Management Institute said in a note.

Write to Christian Berthelsen at [e-mail]