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Friday, September 26, 2014

Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Slips as Warm Forecast Fades


By Christian Berthelsen


  Natural-gas prices edged down Friday as forecasts for hot Midwest weather in the coming days eased, weighing on
expectations for late-season gas demand to power air conditioning.

  Natural gas for October delivery was down 4.1 cents, or 1%, at $3.93 a million British thermal units on the New York
Mercantile Exchange. The October contract expires at the end of trading Friday, and most of the volume in the market
moved into the November contract, which was down 3.2 cents, or 0.8%, at $3.9820/mmBtu.

  Market prices had been bid up recently by forecasts for a spate of late-season warm weather over the key demand areas
of the Midwest and the Northeast, but those forecasts began to ease Friday, with outlooks for the highest temperatures
in the Midwest through early October beginning to cool off. Forecasters now say cooling trends should begin to emerge
across the Midwest in the 10-day outlook as autumn gets under way.

  "Some forecasts beyond next week are beginning to take on a more neutral appearance, as warm temperatures are
beginning to be pushed out," Ritterbusch and Associates said in a note.

  Analysts also cited Thursday's addition of 97 billion cubic feet of natural gas to stored inventories as a bearish
factor in the market. The addition was larger than consensus estimates, and analysts say the final weeks of storage
season could bring additional outsized gains in stockpiles.

  Inventories are rebuilding from the severe U.S. winter of 2013-14 that prompted record demand and huge withdrawals
from inventories. As of Thursday's data, stockpiles stand at 2.988 trillion cubic feet, 13% below average for this time
of year, though analysts expect inventories will be adequately restored by the start of heating season in the coming
weeks.

  In the cash market, physical gas for next-day delivery at the benchmark Henry Hub in Louisiana last traded at $3.91 a
million British thermal units, just above Thursday's range of $3.80-$3.90. Gas at the Transco Z6 hub in New York traded
in a bid-offer range of $1.45-$1.70, below Thursday's range of $1.83-$2.05.


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


  (MORE TO FOLLOW) Dow Jones Newswires

  September 26, 2014 09:34 ET (13:34 GMT)

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

092614 13:34 -- GMT
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