Dow Jones Natural Gas - Morning Commentary

DJ Natural-Gas Prices Give Up Gains



  By Nicole Friedman


  NEW YORK--Natural-gas prices slipped Friday on continued concerns about ample supplies.

  Prices have rallied in recent weeks since hitting a nearly three-year low in April, as cheap prices and hotter
temperatures spurred expectations of demand for gas-fueled power generation to run air-conditioning units. Natural-gas
stockpiles grew less than expected last week, an indication of stronger consumption.

  However, robust production continues to keep the market subdued. In addition, some power generators switch from
natural gas to coal  when gas prices near $3 a million British thermal units, damping demand.

  Front-month futures for June delivery recently fell 3 cents, or 1%, to $2.919 a million British thermal units on the
New York Mercantile Exchange.

  "The market now appears conflicted on whether continued strong cooling demand can sufficiently absorb the supply
excess," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas SA, in a note.

  However, some analysts expect prices to resume rallying next week as temperatures are forecast to heat up.

  "Forecasts for the upcoming two weeks strongly suggest that much warmer-than-normal weather will pervade most of the
East, especially the big energy consuming South and Middle Atlantic regions," said Richard Hastings, strategist at
Global Hunter Securities, in a note. "Prices could extend into the low $3.00s by late next week as evidence mounts that
demand is increasing."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.91/mmBtu, compared with Thursday's
average of $2.9311. Cash prices at the Transco Z6 hub in New York traded at $2.08/mmBtu, compared with Thursday's
average of $2.1313.


  Write to Nicole Friedman at nicole.friedman@wsj.com


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  (END) Dow Jones Newswires

  May 22, 2015 10:15 ET (14:15 GMT)

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052215 14:15 -- GMT
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