Dow Jones - Natural Gas Prices Flip To Losses After Inventory Report

DJ Natural Gas Prices Flip to Losses After Inventory Report


   By Timothy Puko


  Natural gas prices flipped to small losses Thursday after a weekly update on storage levels narrowly missed
expectations, showing a slightly larger surplus than expected.

  The U.S. Energy Information Administration said storage levels grew by 76 billion cubic feet in the week ended May 1.
That is 1 bcf more than the 75-bcf average of forecasters surveyed by The Wall Street Journal.

  The EIA update is widely considered one of the best measures of supply and demand for the natural gas market. This
draw would indicate slightly larger supply or smaller demand than expected, although the difference is likely too small
to be significant.

  The front-month June contract recently traded down 2.8 cents, or 1%, at $2.748 a million British thermal units on the
New York Mercantile Exchange. It had been trading about 1.7% higher earlier in the morning about 30 minutes before
EIA's data release.

  "The only thing fundamental is that they're going to be pumping a ton of gas into every pipeline they can get. And
that's not going to change," said Michael Doyle, a broker at Eclipse International Inc. in New York.

  The sharp turn after such a small miss is likely a sign that technical traders are still the primary driver in the
market Thursday, brokers said.

  Prices had received a boost as they surpassed their 50-day moving average and approached their 100-day moving
average, a signal that the momentum could send prices higher, said Martin King, vice president of institutional
research at FirstEnergy Capital Corp. in Calgary. But prices this week have repeatedly hit a lid just above
$2.80/mmBtu, failing to break through to a new seven-week high, which encouraged selling late Thursday morning, said
Peter Donovan, broker for Liquidity Energy in New York.

  "You knock on the door three times and nobody answers, then you go away," Mr. Donovan said.

  This addition brought storage levels to 1.8 trillion cubic feet, 71% more than a year ago and 3.6% below the
five-year average.


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  (END) Dow Jones Newswires

  May 07, 2015 11:04 ET (15:04 GMT)

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

050715 15:04 -- GMT
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