Dow Jones - End Of Day Natural Gas Commentary

DJ Natural-Gas Futures Extend Gains on Cooler Temperatures

  By Leslie Josephs and Christian Berthelsen


  NEW YORK-Natural-gas prices settled at a 2 1/2-week high on Wednesday ahead of seasonally lower temperatures in the
U.S., raising expectations for gas-fired heating demand.

  Natural gas for October delivery rose 1.8 cents, or 0.5%, to $4.013 a million British thermal units, the highest
settlement since Aug. 29 on the New York Mercantile Exchange. It was the fourth-consecutive session of gains, the
longest winning streak since June 6, when the market rose for five straight sessions.

  "Much of this rally hinges on traders pricing in a colder start to winter," said Aaron Calder, a senior market
analyst at Gelber & Associates.

  Forecasts for the next week to 10 days predicted new pockets of cool weather in the U.S. Southwest, Midwest and
Northeast that could "marginally enhance early season overnight heating demand," Commodity Weather Group said in a
note.

  But higher demand hasn't yet materialized, Mr. Calder said.

  Earlier forecasts had largely predicted neutral conditions in the start to the so-called shoulder season, when mild
temperatures normally hold little demand for either gas-fired heating or cooling.

  Repairs on a Transco pipeline in Louisiana also were curtailing supplies, with natural-gas flows unavailable to
several directions for up to 10 days. The repairs, following the shutdown of a pipeline that feeds Gulf of Mexico
production to the Henry Hub delivery point in Louisiana, lent support to futures.

  The market will be watching weekly data on Thursday to check on the state of U.S. supplies before winter. Analysts
expect 89 billion cubic feet of gas were added to stockpiles in the week ended Sept. 12, 25% more than average for this
time of year.

  Research firm Ritterbusch and Associates said the cool weather forecasts would cushion any price declines spurred by
the weekly report.

  "While our bearish production forecasts remain intact, we are forced to concede to a cool start to the fall period
that could take any triple-digit supply builds during the coming weeks off of the table," Ritterbusch said in a note.
The firm expects to see a 95 billion-cubic-feet increase in the report.

  The natural-gas industry is approaching the end of the season during which it replenishes inventories depleted during
the prior winter. Analysts' estimates would put supplies at 2.9 trillion cubic feet last week, down 13% from the
five-year average for the same week.

 FUTURES         SETTLEMENT    NET CHANGE
 Nymex October     $4.013       +1.8c
 Nymex November    $4.077       +1.4c
 Nymex December    $4.163       +0.6c

 CASH HUB         RANGE         PREVIOUS DAY
 El Paso Perm  $3.875-$3.985    $3.80-$3.85
 El Paso SJ    $3.970-$3.995    $3.8000-$3.8475
 Henry Hub     $3.935-$4.000    $3.8300-$3.8750
 Katy          $3.95-$4.08      $3.85-$3.92
 SoCal         $4.1900-$4.3975  $4.05-$4.29
 Tex East M3   $2.395-$2.520    $2.40-$2.54
 Transco 65    $3.96-$4.05      $3.8475-$3.9000
 Transco Z6    $2.42-$2.52      $2.45-$2.60
 Waha          $3.985-$4.000    $3.830-$3.865


  Write to Leslie Josephs at leslie.josephs@wsj.com


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  (END) Dow Jones Newswires

  September 17, 2014 16:16 ET (20:16 GMT)

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

091714 20:16 -- GMT
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