Dow Jones - Natural Gas Hits One-Week High As Oversupply Evaporates

DJ Natural Gas Hits One-Week High as Oversupply Evaporates


   By Timothy Puko


   Natural gas made steady gains Thursday on signs of a rare reprieve from chronic oversupply.

  Gas prices have been resilient all month, defying a near-record number of bets that money managers placed against
them in recent weeks. A hot spell spread across the country raised demand for gas-fired power just as production cuts
and pipeline outages started to choke back supply.

  The U.S. Energy Information Administration said Thursday storage levels grew by 75 billion cubic feet, 13% below the
five-year average, in the week ended June 19. It is the smallest storage addition in more than two months, and suggests
the market has come back into balance after a long period of booming supply repeatedly outpacing demand.

  Prices for the front-month July contract settled up 9.1 cents, or 3.3%, to $2.85 a million British thermal unit on
the New York Mercantile Exchange. The gains put gas at its highest settlement in a week and up 7.9% month-to-date.

  Power plants usually burn more gas as the weather gets hotter and people turn on their air conditioners. One measure
of that demand, cooling degree days, was 43% above the 30-year average for last week, according to Simmons & Co.
International.

  "More demand from here means [the] gas price needs to move higher to keep the market balanced," Tudor, Pickering,
Holt & Co. said.


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


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  (END) Dow Jones Newswires

  June 25, 2015 15:30 ET (19:30 GMT)

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

062515 19:30 -- GMT
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