Dow Jones - Natural Gas Down As Divided Market Awaits Data

DJ Natural Gas Down as Divided Market Awaits Data


   By Timothy Puko


  Natural gas prices are down, but have been flip-flopping around unchanged Thursday as the impact of a glut continues
to divide the market.

  Natural gas for June delivery is down 2.2 cents, or 1%, at $2.119 a million British thermal units on the New York
Mercantile Exchange. The market has held relatively close to unchanged and switched directions several times, not
uncommon on Thursday mornings ahead of the U.S. Energy Information Administration's weekly update on storage levels,
scheduled for 10:30 a.m. EDT.

  That is often considered the best measure of supply and demand, and this week will likely show that storage levels
grew by 66 billion cubic feet, according to the average of 21 forecasters surveyed by The Wall Street Journal. That is
about on par with the 64-bcf average addition for this week of the year.

  Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, warned clients Thursday that prices
could fall another 20 cents because the storage glut left from the winter is still so large. Historic warm weather
limited heating demand this past winter and stockpiles likely finished last week 49% above levels from a year ago and
47% above the five-year average for the same week, according to The Wall Street Journal survey.

  "Our rally seems to be stalling for the moment due to the near record amount of gas in the ground," said Gene
McGillian, an analyst at Tradition Energy.

  Around the traditional start of U.S. trading, prices surged from a low of around $2.11/mmBtu up to about
$2.175/mmBtu, but then quickly fell all the way back. Prices often stay calm or without a clear trend ahead of the
weekly report because many traders wait for that data before making big moves, analysts and traders have said.

  Even with the recent downturn, prices are still up about 30% from a 17-year low it settled at on March 3. Many
speculators are betting massive declines in spending from exploration and production companies will soon lead to lower
output and possibly a shortage of gas, especially in the upcoming winter.


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


  (END) Dow Jones Newswires

  May 05, 2016 09:55 ET (13:55 GMT)

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

050516 13:55 -- GMT
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