°¿°

[Myself °¿°]

Natural Gas Slips on Weather Outlook
Moderate temperatures at this time of year reduce demand for natural gas as an indoor-heating fuel
By NICOLE FRIEDMAN
Nov. 2, 2015 10:59 a.m. ET
http://www.wsj.com/articles/natural-gas-slips-on-weather-outlook-1446479961
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 [e-mail]