Dow Jones Natural Gas - Market Falls to 2-Year Low On Strong Supply

DJ Natural Gas Sets Fresh Two-Year Low on Strong Supply


   By Timothy Puko


  Natural gas extended its losing streak to a third session and set a fresh two-year low as traders continue to sell
off because of strong supply, analysts said.

  The front-month March contract settled down 2.8 cents, or 1%, at $2.691 a million British thermal units on the New
York Mercantile Exchange.

  Losses are still mounting from strong stockpile data issued Thursday, analysts said. Storage levels shrank by 94
billion cubic feet, the EIA reported Wednesday. That was 17 bcf lower than expectations and was just the fourth time in
20 years that the stockpile drain for this week of January wasn't at least 100 bcf, according to Simmons & Co.
International.

  "Demand has simply not been strong enough this winter to have a significant impact on the robust production levels,"
Dominick Chirichella, analyst at the Energy Management Institute, said in a note.

  Traders are concerned with how quickly storage is building up, a pace fast enough right now to exceed the country's
storage capacity, according to analysts. Utilities are waiting before they strike any contracts for long-term supply,
expecting that growing stockpiles will keep prices cheap even as the high summer season for electricity demand
approaches, Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston, said in a
note to clients.

  "If the cold weather fails to materialize, the market will have a serious glut on its hands," he added.


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


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  (END) Dow Jones Newswires

  January 30, 2015 15:02 ET (20:02 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

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