Dow Jones - End of Day Natural Gas Commentary

DJ Natural-Gas Futures Gain on Forecasts for Warmer Weather



  By Christian Berthelsen


  NEW YORK--Natural-gas futures ticked higher Monday as the market took stock of predictions of warm weather for much
of the country in the coming weeks and whether that might prompt demand for gas-powered air conditioning.

  Natural gas for October delivery rose 1.3 cents, or 0.3%, to settle at $3.850 a million British thermal units on the
New York Mercantile Exchange. The market flipped between gains and losses over the course of the day as traders bet
whether the forecasts could spell higher demand for natural gas, the fuel stock for power plants that ramp up
production as customers run their air conditioners.

  An approaching late-season warm front is expected to bring temperatures in the 70s and 80s to much of the Midwest and
Northeast into early October. Some analysts said the higher temperatures wouldn't be hot enough to drive cooling demand
and would likely result in huge additions to natural-gas inventories in the coming weeks. But others said it could
prompt some demand.

  "The market's trying to weigh whether we're going to see increasing heating demand or increasing cooling demand,"
said Matt Smith, an analyst for utility company Schneider Electric. "It hasn't made up its mind."

  The market will get more clarity on inventory levels with the weekly release of U.S. storage data on Thursday, with
some analysts expecting a possible triple-digit increase in stockpiles. Total stockpiles stood at 2.8 trillion cubic
feet as of last week's report, about 14% below average for this time of year. The market is rebuilding supplies that
were depleted by the previous harsh winter, and analysts expect inventories will be adequate by the start of heating
season, around 3.5 trillion cubic feet.

FUTURES         SETTLEMENT   NET CHANGE
Nymex October     $3.850      +1.3c
Nymex November    $3.908      +0.5c
Nymex December    $3.994      +0.2c

CASH HUB          RANGE       PREVIOUS DAY
El Paso Perm   $3.8575-$3.96  $3.750-$3.795
El Paso SJ     $3.92-$3.96    $3.76-$3.80
Henry Hub      $3.85-$3.895   $3.845-$3.880
Katy           $3.86-$3.91    $3.84-$3.95
SoCal          $4.09-$4.24    $3.98-$4.06
Tex East M3    $2.02-$2.23    $1.62-$1.84
Transco 65     $3.83-$3.87    $3.84-$3.87
Transco Z6     $2.04-$2.12    $1.60-$1.80
Waha           $3.86-$3.925   $3.76-$3.82


  Write to Christian Berthelsen at christian.berthelsen@wsj.com


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  (END) Dow Jones Newswires

  September 22, 2014 15:54 ET (19:54 GMT)

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

092214 19:54 -- GMT
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