DJ Natural Gas Holding Steady as Traders Await Stockpile Report
By Timothy Puko
NEW YORK--Natural-gas prices are holding steady Thursday with traders consolidating ahead of what could be a wild
ride later in the morning.
Natural gas for November delivery rose 0.6 cent, or 0.2%, at $3.806 a million British thermal units on the New York
Mercantile Exchange. Trading has stayed within a 4-cent range.
A day after prices hit a one-month low, many traders who used short-selling to bet that prices would fall are now
buying back in to take their profits, said Tom Saal, a broker at INTL FCStone Latin America in Miami. Traders commonly
close out bets ahead of the U.S. Energy Information Administration's weekly update on natural gas storage levels, which
comes Thursdays at 10:30 a.m. EDT.
"It'll probably be a wild price day and they don't want to be involved in that," Mr. Saal said.
Analysts, traders and brokers expect the report to show a 90 billion-cubic-feet addition for the week that ended Oct.
10, according to The Wall Street Journal's weekly survey. But forecasted additions in the survey stretched from 78 bcf
up to 106 bcf, one of the broadest ranges in months. That wide variety of opinions signal a lot of uncertainty in the
market and a broad range of possible reactions after the EIA's release.
A 90 bcf addition would be 15% larger than the average addition for that time of year. It would be the eighth-highest
addition ever for a week in October, according to EIA records that date back through 1994. That would fit with a string
of large stockpile additions that have come throughout this year from a combination of record domestic production and
comfortable weather limiting demand.
October weather appears to fit that pattern and will likely limit demand for weeks to come. Above-normal
temperatures, some as much 15 degrees Fahrenheit above normal, will cover large parts of the country through the end of
the month, according to MDA Weather Services. Without any cold to push demand for home heating, prices shouldn't push
above $4/mmBtu, according to energy-consulting firm Gelber & Associates in Houston.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.77/mmBtu, compared with
Wednesday's range of $3.7625-$3.84. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$1.91-$2.07/mmBtu, compared with Wednesday's range of $2.05 to $2.08.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
October 16, 2014 09:38 ET (13:38 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
101614 13:38 -- GMT
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