DJ Natural-Gas Prices Fall on Larger-than-Expected Surplus
By Timothy Puko
NEW YORK--Natural-gas futures are falling Thursday after a weekly stockpile
report showed a larger surplus than expected.
Producers added 88 billion cubic feet of gas to storage for the week ended
Aug. 15, the U.S. Energy Information Administration said. The addition was four
billion cubic feet larger than what analysts and traders had expected.
Natural gas for August delivery fell 1.9% immediately after the data
release, giving back what had been slight gains from early-morning trading. It
recently traded down 1.4 cents, or 0.4%, for the day to $3.809 a million
British thermal units on the New York Mercantile Exchange.
Traders use the EIA update to gauge how quickly stockpiles are recovering
from high demand that drained them to 11-year lows this winter. Last week's
addition refilled stockpiles to 2.6 trillion cubic feet, nearly within 17% of
the five-year average level for that week of the year. It had been at less than
half of the average at the start of spring.
Producers have been closing that gap at a record pace and there are reasons
to think that will continue, pushing prices down further, said John Kilduff,
founding partner of Again Capital in New York, which invests in energy
commodities. Warmer weather that could raise demand for gas-fired power has
repeatedly failed to materialize this summer.
The stockpile addition was more than 80% larger than the five-year average
for that week of the year. With the summer peak demand season just about over,
the healthy addition Thursday could be a sign of more large surpluses to come,
Mr. Kilduff said.
"The heat is all coming too little too late," he added. "It's definitely
enough to take the wind out of the sails of the little rally we've seen here."
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(END) Dow Jones Newswires
August 21, 2014 11:00 ET (15:00 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
082114 15:00 -- GMT
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