Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Wavers But Posts Gain for Week


   By Nicole Friedman


  NEW YORK--Natural-gas prices bounced slightly higher Friday, after a sharp selloff the day before, as traders tried
to assess upcoming demand for the fuel.

  Natural gas for October delivery wavered between gains and losses before settling up 3.4 cents, or 0.9%, at $3.857 a
million British thermal units on the New York Mercantile Exchange. Prices posted a 1.7% gain for the week.

  "It was so slow today," said Frank Clements, co-owner of Meridian Energy Brokers Inc. "The market is about priced
where we should be."

  On Thursday, prices slumped 3.3% after a weekly government storage report showed that supplies grew by 92 billion
cubic feet last week, well above the 82 bcf that analysts and traders had expected.

  After a frigid winter depleted natural-gas supplies, inventories are now just 14% below the five-year average level
for the week. Production has been much stronger than anticipated this summer, while demand for gas-powered electricity
to fuel air-conditioning units has been muted.

  "The last two storage reports showed that demand for natural gas is minimal," said Aaron Calder, analyst at Gelber &
Associates in Houston, in a note.

  Some traders are betting that demand will rise when colder weather sets in, he said. About half of U.S. households
use natural gas as their primary heating fuel.

  But "if October and November are normal, or warmer than normal, then the market would have a glut of new supply with
little demand to absorb it," Mr. Calder said.

  Forecasts are mixed, said energy-advisory firm Ritterbusch & Associates, noting that calls for some snow in the North
is being offset by warmer temperatures in the West.

  Barclays lowered its natural-gas average price forecasts to $4.30/mmBtu this year and $4.01/mmBtu next year, down
from its prior forecasts for $4.55/mmBtu this year and $4/24mMBtu next year. The bank cited continued robust production
and less power-plant switching from natural gas to coal than expected.

   FUTURES           SETTLEMENT           NET CHANGE
   Nymex October     $3.857               +3.4c
   Nymex November    $3.910               +3.7c
   Nymex December    $3.991               +3.2c

   CASH HUB          RANGE                PREVIOUS DAY
   El Paso Perm      $3.80-$3.82          $3.75-$3.70
   El Paso SJ        $3.81-$3.83          $3.73-$3.82
   Henry Hub         $3.85-$3.9425        $3.795-$3.88
   Katy              $3.87-$3.90          $3.77-$3.86
   SoCal             $4.01-$4.275         $3.98-$4.235
   Tex East M3       $2.40-$2.60          $1.85-$2.22
   Transco 65        $3.845-$3.87         $3.755-$3.83
   Transco Z6        $2.45-$2.60          $2.00-$2.12
   Waha              $3.83-$3.835         $3.75-$3.76


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


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  (END) Dow Jones Newswires

  September 12, 2014 15:55 ET (19:55 GMT)

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

091214 19:55 -- GMT