Dow Jones - Natural Gas Gains As Stockpiles Sink

DJ Natural Gas Gains as Stockpiles Shrink



  By Nicole Friedman


  NEW YORK--Natural gas prices rose Thursday after weekly inventory data showed that stockpiles fell more than expected
last week.

  Natural gas inventories shrank for the first time since March in the week ended Nov. 27, the U.S. Energy Information
Administration said Thursday. Stockpiles withdrew by 53 billion cubic feet, more than the 51 bcf decline that analysts
and traders surveyed by The Wall Street Journal had expected.

  Futures for January delivery rose as high as $2.19 a million British thermal units on the New York Mercantile
Exchange after the report, before falling into negative territory during intraday trading. Prices settled up 1.6 cents,
or 0.7%, at $2.181 a million British thermal units on the New York Mercantile Exchange.

  Consumers usually start taking natural gas out of storage in late October or early November as demand for the heating
fuel increases. But mild weather has kept consumption low in recent weeks, pushing inventories to record highs above 4
trillion cubic feet.

  Last week's larger-than-expected draw came as "a small warning sign that if the weather ever changes, we're going to
see bigger draws than people think," said Phil Flynn, analyst at Price Futures Group. "Of course, that's all conjecture
unless it ever gets cold."

  The market remains oversupplied. As of Nov. 27, stockpiles stood at 3.956 tcf, 6.7% above the five-year average for
this time of year.

  "Even with the draw today, you're basically just under 4 tcf, and we're in December now. So there's a lot of gas
around," said Gene McGillian, analyst at Tradition Energy. "It doesn't look like we have winter starting up."

  Warmer-than-average temperatures in the next two weeks are expected to keep consumption subdued, meaning that
stockpile draws in the coming weeks could be smaller than average, analysts say.

   FUTURES SETTLEMENT   NET CHANGE
   Nymex January $2.181    +1.6c
   Nymex February $2.232   +1.2c
   Nymex March $2.256      +0.4c
   CASH HUB        RANGE      PREVIOUS SESSION
   El Paso Perm $2.105-$2.13   $2.145-$2.235
   El Paso SJ $2.11-$2.145     $2.15-$2.19
   Henry Hub $2.10-$2.14       $2.1325-$2.21
   Katy $2.13-$2.20            $2.14-$2.27
   SoCal $2.26-$2.31           $2.30-$2.36
   Tex East M3 $1.42-$1.50     $1.40-$1.53
   Transco 65 $2.09-$2.12      $2.12-$2.22
   Transco Z6 $2.09-$2.10      $2.14-$2.22
   Waha $2.10-$2.11            $2.13-$2.18


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


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  (END) Dow Jones Newswires

  December 03, 2015 15:36 ET (20:36 GMT)

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

120315 20:36 -- GMT