Dow Jones - End of Day Natural Gas Commentary

DJ Natural-Gas Market Arrests Slide Despite Cooler Outlook


   By Christian Berthelsen


  Natural-gas prices edged higher Monday, arresting Friday's steep slide in a
move analysts attributed to traders closing out bearish positions and locking
in profits from the recent selloff.

  Front-month September futures ended the day up 1.6 cents, or 0.4%, at $3.792
a million British thermal units on the New York Mercantile Exchange. The market
touched a low of $3.727 in overnight trading but rebounded in the morning and
stayed aloft the rest of the day.

  The market fell more than 3% on Friday as the fundamental picture for
natural-gas supply and demand weakened. That picture didn't improve on Monday,
with fresh forecasts continuing to turn cooler for the northern U.S. and the
eastern seaboard through the end of August, and continued projections for
larger-than-average additions to gas stockpiles.

  But a combination of low prices and traders closing out bets that the market
would fall likely stopped the selloff for now, brokers and analysts said.

  National inventories are still rebounding from deep depletion brought on by
the severe winter. Although stockpiles are still 19% below average levels,
robust production and a mild summer that has kept gas-fired electricity demand
to a minimum have traders believing supplies will be adequately restored in
time for the start of heating season.

  "People probably don't know whether to buy it or sell it," said Tom Saal, a
broker with INTL FCStone in Miami. "A lot of the bearishness of the past few
weeks has been priced into this market. Traders were probably looking for
something even more bearish and haven't seen anything new yet."

FUTURES           SETTLEMENT   NET CHANGE
Nymex September     $3.792      +1.6c
Nymex October       $3.828      +2.1c
Nymex November      $3.901      +2.2c

CASH HUB            RANGE     PREVIOUS DAY
El Paso Perm    $3.755-$3.82  $3.7475-$3.79
El Paso SJ      $3.29-$3.825  $3.76-$3.785
Henry Hub       $3.725-$3.795 $3.72-$3.795
Katy            $3.84-$3.90   $3.85-$3.87
SoCal           $3.97-$4.26   $3.965-$4.16
Tex East M3     $2.48-$2.68   $1.90-$2.20
Transco 65      $3.79-$3.8275 $3.755-$3.81
Transco Z6      $2.65-$2.78   $1.99-$2.18
Waha            $3.77-$3.79   $3.76-$3.78


  Write to Christian Berthelsen at christian.berthelsen@wsj.com


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  (END) Dow Jones Newswires

  August 18, 2014 15:43 ET (19:43 GMT)

  Copyright (c) 2014 Dow Jones & Company, Inc.

081814 19:43 -- GMT
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