Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Pushes 2014 Low on Warm Weather


   By Timothy Puko


  NEW YORK--Natural gas prices are pushing their new 2014 lows even lower Friday with warm weather forecasts suggesting
little home heating demand through October.

  Natural gas for November delivery fell 4.2 cents, or 1.2%, at $3.58 a million British thermal units on the New York
Mercantile Exchange. This puts gas on a three-day losing streak with losses in eight of the last nine sessions.

  The front-month price has firmly broken out of the $3.80/mmBtu to $4/mmBtu range it had traded in between mid-July
and mid-October. Record supply, coupled with limited demand because of warm weather have traders abandoning concern
over once-low stockpiles and selling off just weeks before winter.

  Weather forecasts show winter chill won't be coming soon. They have been predicting above-normal October temperatures
for weeks and Thursday showed those spreading, especially in the big Midwest markets.

  Technical traders have piled on, pushing a selloff even harder, said Frank Clements, co-owner of Meridian Energy
Brokers Inc. outside New York. He expects prices to mimic last year, dropping below $3.50/mmBtu and not rising for the
winter until at least the first week of November.

  "The thing is going to snowball," Mr. Clements said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.5275/mmBtu, compared with
Thursday's range of $3.585-$3.605. Cash prices at the Transco Z6 hub in New York last traded at $2.29/mmBtu, compared
with Thursday's range of $2.70 to $3.00.


  Write to Timothy Puko at Tim.Puko@wsj.com


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  (END) Dow Jones Newswires

  October 24, 2014 09:35 ET (13:35 GMT)

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

102414 13:35 -- GMT
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