Dow Jones - Natural Gas Lifts Off 5-Month Low

DJ Natural Gas Lifts Off Five-Month Low



  By Nicole Friedman


  NEW YORK--Natural-gas prices rose from five-month intraday lows on Thursday to settle higher, suggesting that few
sellers are left in the market.

  Natural-gas inventories grew more than expected last week, the U.S. Energy Information Administration said Thursday.
Natural-gas producers injected 106 billion cubic feet of natural gas into storage last week, more than the 97 bcf
addition that analysts surveyed by The Wall Street Journal had expected.

  Natural gas futures for October delivery dropped as low as $2.521 a million British thermal units on the New York
Mercantile Exchange after the report, the lowest intraday price since April 29.

  But prices later rebounded and settled up 2.2 cents, or 0.9%, at $2.591/mmBtu.

  Robust production has pushed the natural gas market in oversupply this summer despite strong demand for gas-powered
electricity to run air-conditioning units. Inventories as of Sept. 18 totaled 3.44 trillion cubic feet, 4.5% above the
five-year average for the same week.

  Analysts expect injections to remain large as summertime demand continues to fade.

  "We haven't gotten the heating demand yet, and we're ending the cooling demand," said Donald Morton, senior vice
president at Herbert J. Sims & Co. "You're seeing natural gas production continuing to flood into storage. ... I would
expect to see the same thing next week."

  However, money managers including hedge funds already hold a large bet that natural-gas prices will fall, and
speculators may not have much interest in adding to that bet, analysts said. As of Sept. 15, money managers held a net
bet of 118,367 contracts on falling natural-gas prices.

  Natural-gas prices are down 3.6% this month and 10% for the year.

  "There's a fair bit of selling exhaustion," said energy-advisory firm Gelber & Associates in a note. "The amount of
oversupply has already been priced in."


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


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  (END) Dow Jones Newswires

  September 24, 2015 15:49 ET (19:49 GMT)

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

092415 19:49 -- GMT
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