Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Prices Edge Lower on Strong Supply, Comfortable Weather


  By Timothy Puko


  NEW YORK--Natural-gas prices closed lower on Friday for a second day, as big surpluses of the fuel and expectations
of lower demand encouraged selling.

  Prices for the front-month October contract fell 7.3 cents, or 1.9%, to $3.837 a million British thermal units on the
New York Mercantile Exchange. After a rally above $4/mmBtu to start the week, two days of losses have brought gas back
toward the bottom of a 32-cent range in which it has traded for nearly all the past two months.

  Traders began selling on Thursday, after the U.S. government reported stockpiles grew last week faster than expected.
That selling continued into Friday, traders and analysts said. Producers are refilling storage at a record rate, fast
enough to get storage levels back to nearly normal, even though they started the spring at an 11-year low, according to
the U.S. Energy Information Administration.

  Weather forecasts added pressure on natural-gas prices on Friday, said Aaron Calder, senior market analyst at
energy-consulting firm Gelber & Associates in Houston, in a note. Predictions for a Northeastern cold snap shrank and
forecasts said above-normal temperatures will appear by October, Mr. Calder said, suggesting little demand for natural
gas to either heat or cool homes. "Significant heating demand is still a ways off, and in the meantime the storage
deficit will continue to fill," he said.

  With comfortable September weather settling in, technical traders are driving the market, said John Woods, president
of JJ Woods Associates and a Nymex floor trader. They sell as prices near $4/mmBtu and buy when it falls below $3.80,
he said.

  "I don't see any weather out there that's going to put us in either direction," Mr. Woods said. The market is trading
"merely a point on a chart."

FUTURES         SETTLEMENT   NET CHANGE
Nymex October     $3.837      -7.3c
Nymex November    $3.903      -7.2c
Nymex December    $3.992      -6.5c

CASH HUB          RANGE       PREVIOUS DAY
El Paso Perm   $3.750-$3.795  $3.90-$3.9575
El Paso SJ     $3.76-$3.80    $3.92-$3.9675
Henry Hub      $3.845-$3.880  $3.94-$3.995
Katy           $3.84-$3.95    $3.9625-$4.03
SoCal          $3.98-$4.06    $4.14-$4.35
Tex East M3    $1.62-$1.84    $1.85-$2.25
Transco 65     $3.84-$3.87    $3.87-$3.995
Transco Z6     $1.60-$1.80    $2.00-$2.35
Waha           $3.76-$3.82    $3.94-$3.96


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

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  (END) Dow Jones Newswires

  September 19, 2014 15:50 ET (19:50 GMT)

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

091914 19:50 -- GMT
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