Market Commentary with NG Chart

December 5th, 2014

NEW YORK–Natural gas snapped a six-session losing streak Friday but held

near recent lows on expectations that above-average temperatures would limit

demand for the heating fuel.


 Natural gas for January delivery rose 7 cents, to $3.72 a

million British thermal units on the New York Mercantile Exchange.


Prices have slumped this week as forecasts called for warmer-than-normal

temperatures. Winter is typically the strongest season for natural-gas demand,

as half of U.S. households use gas as their primary heating fuel.


Weather forecasts were little changed Friday. But the coldest weather often

comes in January and February, leaving traders hesitant to bet on larger price

declines before seeing how the rest of the winter will shape up, said Teri

Viswanath, director of commodity strategy for natural gas at BNP Paribas SA, in

a note.


“Given just how far prices have fallen in a relatively compressed period of

time, it appears that traders are beginning to question further declines,” Ms.

Viswanath said. “Without verification of continued mild weather in January, it

appears that the sell-off has momentarily stalled.”


Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana

recently traded at $3.4175/mmBtu, according to Intercontinental Exchange Inc.,

versus Thursday’s average of $3.5478/mmBtu.


Natural gas for next-day delivery at Transcontinental Zone 6 in New York

traded between $3.15 and $3.50/mmBtu, compared with $3.5345/mmBtu Thursday.

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