Dow Jones - Natural Gas Slumps As Oversupply Grows

DJ Natural Gas Slumps as Oversupply Grows


   By Nicole Friedman


  NEW YORK--Natural-gas prices dropped to a two-month low Thursday as weekly inventory data showed that the market
remains oversupplied amid sluggish demand.

  Natural-gas futures for March delivery settled down 9 cents, or 4.6%, at $1.852 a million British thermal units on
the New York Mercantile Exchange, the lowest level since Dec. 18.

  A growing oversupply of natural gas due to robust production and mediocre demand has weighed on prices this winter.
Warmer-than-normal weather in the eastern U.S. has reduced the need for natural gas to heat homes and offices.

  Stockpiles of natural gas fell by 158 billion cubic feet to 2.706 trillion cubic feet in the week ended Feb. 12, the
Energy Information Administration said Thursday.

  The stockpile draw was larger than the 154-bcf draw expected by analysts in a Wall Street Journal survey, but it was
smaller than the five-year average drain for the week of 170 bcf.

  "The 158-bcf net withdrawal for last week was...still somewhat bearish on a seasonally adjusted basis," Tim Evans,
analyst at Citigroup Inc., said in a note. "With forecasts for mild temperatures ahead, we'd also suspect that any
upward price reaction off the storage report may prove short-lived."

  Inventories as of Feb. 12 stood 25% above levels from a year ago and 26% above the five-year average for the same
week.

   FUTURES          SETTLEMENT         NET CHANGE
   Nymex March          $1.852              -0.9c
   Nymex April          $1.927              -8.4c
   Nymex May            $2.004              -7.2c

   CASH HUB              RANGE   PREVIOUS SESSION
   El Paso Perm   $1.60-$1.635        $1.61-$1.63
   El Paso SJ      $1.60-$1.63        $1.63-$1.66
   Henry Hub      $1.85-$1.885       $1.87-$1.925
   Katy           $1.765-$1.82        $1.78-$1.82
   SoCal         $1.6725-$1.71       $1.72-$1.745
   Tex East M3     $1.37-$1.48      $1.7625-$1.88
   Transco 65     $1.84-$1.885        $1.87-$1.89
   Transco Z6      $1.96-$1.99        $2.08-$2.15
   Waha            $1.69-$1.70        $1.67-$1.69


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


  (END) Dow Jones Newswires

  February 18, 2016 15:26 ET (20:26 GMT)

  Copyright (c) 2016 Dow Jones & Company, Inc.

021816 20:26 -- GMT
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