DJ Natural-Gas Prices Rise as Winter Comes Into Focus
By Nicole Friedman
NEW YORK--Natural-gas prices rose on Thursday, as traders weighed rapidly growing supplies against concerns that
another cold winter will spark high demand for the heating fuel.
Natural gas for October delivery settled up 6 cents, or 1.5%, at $3.971 a million British thermal units on the New
York Mercantile Exchange.
Producers added 97 billion cubic feet of natural gas into storage in the week ended Sept. 19, the U.S. Energy
Information Administration said on Thursday. Analysts and traders surveyed by The Wall Street Journal had called for a
92-bcf injection. The addition was larger than any of the survey projections.
Though natural-gas supplies were largely depleted by record demand for the heating fuel last winter, inventories have
rebuilt unusually quickly this spring and summer. Production has been higher than expected, and mild weather has kept
demand low for gas-powered electric air-conditioning.
However, gas prices pared losses after the report's release despite the larger-than-expected build.
The National Weather Service's forecast for the first two weeks of October is showing unusually cold weather, which
could be sparking some concern about robust demand, said Aaron Calder, analyst at Gelber & Associates in Houston.
Injections have been this summer, but inventories are still below average. As of Sept. 19, stocks stood at 2.988
trillion cubic feet, 13% below the five-year average for the week.
"The upward move is definitely winter focused," Mr. Calder said. "An early start to winter when we already don't have
... as much as we're used to, would be bullish." However, Mr. Calder noted, other forecast models are showing more
moderate weather in early October.
The October contract expires on Friday. The more-actively traded November contract settled up 4.9 cents, or 1.2%, at
$4.014/mmBtu.
"In the next week, November will be the spot month," said Tom Saal, a broker at INTL FCStone Latin America in Miami.
"You're transitioning into the demand season."
FUTURES SETTLEMENT NET CHANGE
Nymex October $3.971 +6.0c
Nymex November $4.014 +4.9c
Nymex December $4.097 +4.7c
CASH HUB RANGE PREVIOUS DAY
El Paso Perm $3.75-$3.805 $3.72-$3.815
El Paso SJ $3.78-$3.82 $3.73-$3.88
Henry Hub $3.80-$3.90 $3.82-$3.86
Katy $3.81-$3.89 $3.83-$3.88
SoCal $4.00-$4.16 $3.99-$4.17
Tex East M3 $1.78-$1.96 $1.80-$2.05
Transco 65 $3.81-$3.86 $3.7275-$3.835
Transco Z6 $1.83-$2.05 $1.845-$1.90
Waha $3.81-$3.83 $3.80-$3.82
Write to Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
September 25, 2014 15:02 ET (19:02 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
092514 19:02 -- GMT
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