Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Rallies on Signs of Chill and Bargain Buying



  By Timothy Puko


  NEW YORK--Natural gas prices rebounded Friday, flipping from morning losses into small gains on slight signs of cool
weather and an influx of bargain buyers, analysts said.

  The front-month November contract settled up 0.1 cent, or 0.03%, to $3.623 a million British thermal units on the New
York Mercantile Exchange. Prices had hit a new intraday low for 2014, dipping to $3.558/mmBtu before a steady rally
started after 11 a.m.

  Updated weather forecasts show a slight chill possible for the start of November, analysts said. That could drive
heating demand at a time when traders had expected temperatures to be comfortable.

  But the change was only slight, and the new low prices may have played an even larger role in the move, said Aaron
Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston. The $3.50/mmBtu mark is key in
the natural gas market because it is likely to spur more demand from power generators who will then find gas cheap
enough to displace coal, he said.

  "It's just a bargain-hunting rally," Mr. Calder said.

  Analysts at Barclays PLC said Friday that could be a theme for the winter. With coal deliveries often blocked by
congested railroads and nuclear plants also down for maintenance, natural gas demand is likely to stay high enough to
prevent any price dip below $3.50/mmBtu, they said.

  "While power demand...looks low now, the potential exists for an increase," analysts Christopher Louney and Michael
Cohen wrote.

FUTURES           SETTLEMENT         NET CHANGE

Nymex November    $3.623             +0.1c
Nymex December    $3.698              -0.8c
Nymex January     $3.787              -0.4c

CASH HUB          RANGE                        PREVIOUS DAY
El Paso Perm     $3.25-$3.35                  $3.37-$3.485
El Paso SJ      $3.25-$3.305                  $3.42-$3.485
Henry Hub        $3.46-$3.545                 $3.585-$3.605
Katy            $3.40-$3.47                   $3.50-$3.55
SoCal           $3.40-$3.47                   $3.58-$3.68
Tex East M3      $1.50-$2.00                  $1.55-$2.15
Transco 65      $3.47-$3.5225                 $3.525-$3.575
Transco Z6     $2.29-$2.55                    $2.70-$3.00
Waha             $3.34-$3.385                 $3.50-$3.52


  Write to Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  October 24, 2014 15:11 ET (19:11 GMT)

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

102414 19:11 -- GMT
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