Dow Jones - End of Day Natural Gas Commentary

DJ Natural-Gas Futures Rally as Market Catches Glimpse of Autumn

  By Christian Berthelsen


  Natural-gas prices rose to their highest levels in more than two months on Monday as forecasts for cold weather over
the northern Midwest in the coming weeks prompted expectations of the season's first gas-fired heating demand.

  Natural gas for November delivery rose 12.5 cents, or 3.1%, to $4.1540 a million British thermal units on the New
York Mercantile Exchange. The settlement was the highest since July 9, and the day's rally was the largest since June
12. The market has gained nearly 9% in the last four trading sessions.

  The market opened higher with the adoption of November as the new front-month contract, since it was trading higher
than the just-expired October contract, and gained momentum as prices broke through levels where they previously
stalled.

  "The market takes on strength in reaction to chatter about seasonal demand," said Gene McGillian, an analyst with
wholesale brokerage Tradition Energy.

  Weather forecasts are mixed for the coming weeks, with large swaths of above-normal temperatures over much of the
South, Midwest and Eastern Seaboard in the coming days but then turning cooler further into mid-October. It was the
appearance of below-normal temperatures over the northern Midwest two weeks out that prompted the rally.

  Still, some analysts remain skeptical of an early onslaught of fall and winter weather and note that natural-gas
production remains robust, with pipeline data indicating the possibility of massive increases in stored supplies in the
final weeks of the season when producers and utilities add to inventories.

  "Traders are eschewing the long-term fundamental picture to focus on the short-term prospect of early heating
demand," research consultancy Gelber & Associates said in a note.

FUTURES         SETTLEMENT   NET CHANGE
Nymex November   $4.154      +12.5c
Nymex December   $4.227      +11.3c
Nymex January    $4.292      +10.5c

CASH HUB         RANGE       PREVIOUS DAY
El Paso Perm  $3.8275-$3.93  $3.7125-$3.78
El Paso SJ    $3.83-$3.89    $3.7575-$3.82
Henry Hub     $4.00-$4.03    $3.87-$3.9275
Katy          $3.95-$4.01    $3.88-$3.95
SoCal         $4.07-$4.25    $3.97-$4.05
Tex East M3   $1.95-$2.08    $1.56-$2.00
Transco 65    $3.975-$4.02   $3.8675-$3.89
Transco Z6    $2.04-$2.08    $1.62-$2.05
Waha          $3.88-$3.98    $3.84-$3.865


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  (END) Dow Jones Newswires

  September 29, 2014 16:07 ET (20:07 GMT)

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

092914 20:07 -- GMT
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