Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Rises But Holds in Range Ahead of Inventory Data


   By Nicole Friedman


  NEW YORK--Natural-gas prices gained Wednesday but held below $4 a million British thermal units ahead of weekly
government storage data, which is expected to show another large stockpile gain.

  Natural gas for October delivery settled up 9.5 cents, or 2.5%, at $3.911/mmBtu on the New York Mercantile Exchange.

  Moderate weather has kept natural-gas prices within a range between $3.75 and $4/mmBtu for most of the summer.
Natural-gas demand is highly dependent on weather, as hot weather prompts demand for gas-powered electricity to run
air-conditioners and cold weather leads to use of natural gas as a heating fuel.

  The weather is expected to stay mild in the next two weeks.

  "Nothing has changed in the weather data to lead to a surge in prices," said NatGasWeather.com in a note. "With only
a couple days left to trade the October contract, some position squaring could have aided the rise" in prices on
Wednesday.

  The so-called shoulder season between summer and winter is a peak period for producers to replenish storage supplies
before heating demand kicks in.

  "The market is just kind of treading water," said Gene McGillian, broker and analyst at Tradition Energy in Stamford,
Conn. "We probably have to get through the next four weeks, and then we'll see how the market reacts as winter really
closes in."

  As of Sept. 12, natural-gas inventories stood 13% below the five-year average for the week. The U.S. Energy
Information Administration is set to release storage data for the week ended Sept. 19 on Thursday.

  Analysts and traders expect the report to show that natural-gas stockpiles grew by 92 billion cubic feet, according
to a Wall Street Journal survey.

  If the storage estimate is correct, inventories as of Sept. 19 would total 2.982 trillion cubic feet, 12% below the
year-ago level and 13% below the five-year average for the same week.

   FUTURES           SETTLEMENT           NET CHANGE
   Nymex October     $3.911               +9.5c
   Nymex November    $3.965               +9.6c
   Nymex December    $4.050               +9.0c

   CASH HUB          RANGE                PREVIOUS DAY
   El Paso Perm      $3.72-$3.815         $3.82-$3.96
   El Paso SJ        $3.73-$3.88          $3.85-$3.915
   Henry Hub         $3.82-$3.86          $3.875-$3.93
   Katy              $3.83-$3.88          $3.875-$3.935
   SoCal             $3.99-$4.17          $4.07-$4.25
   Tex East M3       $1.80-$2.05          $1.92-$2.075
   Transco 65        $3.7275-$3.835       $3.86-$3.8875
   Transco Z6        $1.845-$1.90         $1.95-$2.05
   Waha              $3.80-$3.82          $3.87-$3.90


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


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  (END) Dow Jones Newswires

  September 24, 2014 15:49 ET (19:49 GMT)

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

092414 19:49 -- GMT
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