Dow Jones - Biggest Rally In 3 Months Today In The Natural Gas Market

DJ Natural Gas Hits $4 on Mix of Indicators

By Timothy Puko

     NEW YORK--Natural-gas prices started Tuesday with their biggest rally in three months, surprising analysts and
traders who are struggling to pinpoint whether technical trading, cool weather forecasts or other factors boosted
prices for a second straight session.

     Natural gas for October delivery briefly peaked above $4 a million British thermal units on the New York
Mercantile Exchange, posting gains of nearly 3% within 20 minutes of the trading floor opening. The last day that
natural gas gained more than 3% was June 12. It recently traded up 10.5 cents, or 2.7%, to $3.981/mmBtu.

     Some traders have said prices need to move higher for the winter, especially as a cool front with temperatures as
much as 15 degrees below normal sweep the country. But other analysts and meteorologists have said that September is
too mild a month for this weather to cause a meaningful boost to demand now, either for heating or cooling.

     There are also technical trading patterns that may have herded buyers into the market, traders and analysts said.
This is the third time since July that natural gas has bounced after dipping below $3.70/mmBtu. Four days of losses
last week may have triggered a reversal pattern, said Frank Clements, co-owner of Meridian Energy Brokers Inc. outside
New York.

     "It's a sign that the bulls are taking over the market," he said. "If you're [a seller], you have to get
out...Everybody we were talking to is scratching their heads."

     Several have warned that these gains could be short term. The shale-drilling boom has helped refill gas stockpiles
at a record pace this summer, putting downward pressure on prices since June.

     "A lot of guys are looking this as a sell opportunity," said Scott Gettleman, an independent trader in New York.

     Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.99/mmBtu, compared with
Monday's range of $3.83-$3.865. Cash prices at the Transco Z6 hub in New York last traded at $2.925/mmBtu, compared
with Monday's range of $2.40 to $2.75.


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  (END) Dow Jones Newswires

  September 09, 2014 10:13 ET (14:13 GMT)

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090914 14:13 -- GMT
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