Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Makes Some Gains on Larger-than-Expected Stockpile Drain


  By Timothy Puko


  Natural gas futures rose slightly Thursday after data showed a larger-than-expected draw from stockpiles.

  The front-month March contract settled up 0.3 cents, or 0.1%, at $2.834 a million British thermal units on the New
York Mercantile Exchange. It set a fresh three-week high, adding to gains on Wednesday that set the highest closing
price since Jan. 28.

  The U.S. Energy Information Administration on Thursday said storage levels fell by 111 billion cubic feet in the week
ended Feb. 13. That is 3 bcf more than the 108-bcf consensus average of 17 forecasters surveyed by The Wall Street
Journal.

  The EIA update is widely considered one of the best measures of supply and demand, and this draw would indicate lower
supply or larger demand than expected. In the minute after the data, prices rose 0.9% to $2.856 a million British
thermal units on the New York Mercantile Exchange.

  A larger-than-expected drain on stockpiles combined with the type of severe cold currently blanketing half of the
country, would often drive prices even higher based on increasing demand for the heating fuel. But traders feel that
there is too little winter remaining to absorb a record amount of supply that has shown few signs of slowing down,
analysts have said.

  That limited gains Thursday and even caused prices to fall throughout large parts of morning trading, said John
Woods, president of JJ Woods Associates and a Nymex trader.

  "Any type of weather that's going to manipulate this market is going to be short lived," Mr. Woods said. "We're going
to be stuck in this type of range until probably the spring."

FUTURES            SETTLEMENT               NET CHANGE
Nymex March        $2.834                   0.3c
Nymex April        $2.875                   1.8c
Nymex May          $2.913                   2c

CASH HUB         RANGE                        PREVIOUS SESSION
El Paso Perm    $2.55-$2.66                   $2.535-$2.59
El Paso SJ      $2.645-$2.625                 $2.5625-$2.59
Henry Hub       $2.925-$3.00                  $2.89-$2.99
Katy            $2.695-$2.73                  $2.67-$2.74
SoCal           $2.73-$2.78                   $2.66-$2.695
Tex East M3     $13.00-$16.50                 $19.00-$23.50
Transco 65      $2.89-$3.00                   $2.91-$2.9325
Transco Z6      $17.00-$35.00                 $27.00-$50.00
Waha            $2.65-$2.70                   $2.545-$2.57


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


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  (END) Dow Jones Newswires

  February 19, 2015 15:09 ET (20:09 GMT)

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

021915 20:09 -- GMT
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