Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Snaps Win Streak


   By Timothy Puko


  Natural gas ended a four-session winning streak as traders begin to heed warnings that the rally may have gone too
far.

  Prices for the front-month June contract fell 0.6 cent, or 0.2%, to $3.01 a million British thermal units on the New
York Mercantile Exchange. Gas briefly surged to its highest intraday price since Jan. 22, spent most of the day in
losses.

  Gas has had a bull run for three weeks but many analysts have warned that it could be maxed out. Many bulls are going
to be cashing out from their successful run, Dominick Chirichella, analyst at the Energy Management Institute, said in
a note. Supplies are also still high, and many traders will retreat because of exceptionally high surpluses likely to
come each week through the rest of the spring, said Bob Yawger, director of the futures division at Mizuho Securities
USA Inc.

  "With that...hanging above our heads, it's going to be hard to rally any higher," Mr. Yawger said.

  The rally has been broadly attributed to rising demand for gas to fuel electricity generation and by money managers
rushing away from what had been a one-sided bet that prices would fall. Hotter-than-normal May weather and the closings
of coal-fired power plants have increased demand for gas-fired power. That encouraged bearish traders to buy back
contracts they had sold, closing out bearish bets before they could go wrong.

  Those factors still propped up the market Monday, Jim Ritterbusch, president of energy-advisory firm Ritterbusch &
Associates, said in a note. He expects that support to give out, but it may not happen immediately, he said.

  "At some point, we feel that the increased demand for gas by the (power) sector will slow as" gas gets more expensive
compared to coal, Mr. Ritterbusch added. "But, such a development can be a slow mover."

FUTURES               SETTLEMENT         NET CHANGE
Nymex June              $3.01            -0.6c
Nymex July              $3.061           -0.9c
Nymex August            $3.083           -0.7c
CASH HUB           RANGE              PREVIOUS SESSION
El Paso Perm  $2.7575-$2.78             $2.64-$2.68
El Paso SJ    $2.76-$2.78               $2.64-$2.68
Henry Hub     $2.98-$3.045              $2.94-$2.975
Katy          $2.92-$3.00               $2.87-$2.9225
SoCal         $2.91-$2.93               $2.80-$2.82
Tex East M3   $1.68-$1.75               $1.40-$1.55
Transco 65    $2.99-$3.05               $2.93-$2.975
Transco Z6    $3.00-$3.14               $2.49-$2.80
Waha          $2.84-$2.90               $2.78-$2.81


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


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  (END) Dow Jones Newswires

  May 18, 2015 14:58 ET (18:58 GMT)

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

051815 18:58 -- GMT
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