US gas prices rebound from 16-year low as warm weather fades
By CHRISTINE BUURMA
Bloomberg
Natural gas advanced from a 16-year low as forecasts showed cooler weather in the Midwest later this month.
Temperatures may be normal in parts of the central US in the last week of December as an extended warm spell begins to weaken, according to Commodity Weather Group. The 14-day relative strength index, or RSI, has been below 30 since Dec. 11, a condition that some traders view as a technical signal to buy.
Gas capped the biggest weekly decline in a year as balmy weather curtailed demand for the heating fuel, limiting withdrawals from storage. Stockpiles are 9.1% above the five-year average, the biggest glut since 2012 for the time of year, amid increased output from shale formations.
“We’re not seeing an indication that the bulls have given up all hope,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The market has been terribly oversold, and any heating demand that comes into the forecast is going to be a significant boost for storage withdrawals.”
Gas futures for January delivery rose 1.2 cents, or 0.7%, to settle at $1.767/MMBtu on the New York Mercantile Exchange after dropping to $1.684, the lowest intraday price since March 19, 1999. Gas slid 11% this week, the largest weekly drop since December 2014.
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