Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Settles Lower as Traders Retreat From Rally



  By Timothy Puko


  NEW YORK--Natural-gas prices closed lower Wednesday, inching away from $4 as traders retreated from their technical
rally.

  The front-month October contract settled down 3 cents, or 0.8%, to $3.954 a million British thermal units on the New
York Mercantile Exchange. The retreat marked the third time since July that prices have hit a ceiling at around
$4/mmBtu after bouncing from dips below $3.80.

  Many analysts and traders said technical trading sparked the two-day rally to start the week. When prices couldn't
surge past $4, technical traders saw it as a sign to pull back, and there wasn't any news or change to the
supply-demand dynamic to convince them otherwise.

  "They seem to be stretched based on the fundamental factors," said Jim Ritterbusch, president of energy-advisory firm
Ritterbusch & Associates.

  A mild summer has already caused large losses for gas prices as record production keeps overwhelming limited demand.
Citigroup Inc. late Wednesday became the latest bank to pull back on gas price forecast, cut its estimate by more than
13% to $3.90/mmBtu both for the rest of 2014 and for 2015.

  Supply is still coming on strong, with producers likely adding 82 billion cubic feet of gas to stockpiles last week,
a third more than the usual addition for that time of year, according to the average forecast of 17 analysts, brokers
and traders surveyed Wednesday by The Wall Street Journal.

  That would put stockpiles 14% below their five-year average level for this time of year, compared with a deficit had
been more than 50% to start the spring, according to data from the U.S. Energy Information Administration.

   FUTURES             SETTLEMENT       NET CHANGE

 Nymex October         $3.954             -3c
 Nymex November        $4.005             -3c
 Nymex December        $4.086             -2.4c

  CASH HUB          RANGE           PREVIOUS DAY

El Paso Perm    $3.845-$3.885       $3.89-$3.91
El Paso SJ        $3.86-$3.88       $3.89-$3.93
Henry Hub         $3.94-$3.98       $3.89-$4.03
Katy              $3.91-$3.94      $3.935-$4.00
SoCal             $4.08-$4.30       $4.12-$4.36
Tex East M3       $2.92-$3.05      $2.825-$2.93
Transco 65        $3.94-$3.955      $3.90-$4.02
Transco Z6        $2.99-$3.09       $2.89-$2.965
Waha              $3.93-$3.93       $3.90-$3.94


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


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  (END) Dow Jones Newswires

  September 10, 2014 15:03 ET (19:03 GMT)

  Copyright (c) 2014 Dow Jones & Company, Inc.

091014 19:03 -- GMT
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