Weather Forecasts Incite Late Sell-Off

To say the weather had an impact on the natural gas futuresmarket last week might be the biggest understatement of the newmillennium. After all, not a day went by that neither forecasters’predictions, nor ever-changing weather itself did not play intotraders’ decisions. Add to that the fact different independent andgovernmental forecasting agencies were not always in agreement. Itall came to a head last Friday when prices soared early in the dayin anticipation of the return of cold temperatures in the Northeastfor the weekend, only to come crashing down that afternoon upon therelease of a fresh medium-range forecast for this week. The Marchcontract was the hardest hit by the sell-off, tumbling 2.2 cents tofinish at $2.57 Friday. Less dependent on the near-term forecast,the outer months managed to hold onto small advances into theclose.

February 14, 2000