Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Sags as Unexpectedly High Supplies Weigh on Prices


   By Nicole Friedman


  NEW YORK--Natural-gas futures continued to slide Friday as traders eyed higher supplies than expected and moderate
demand.

  Natural gas for October delivery fell 2.8 cents, or 0.7%, to $3.795 a million British thermal units on the New York
Mercantile Exchange. The prior day, prices slumped 3.3% after a weekly government storage report showed that supplies
grew by 92 billion cubic feet last week, well above the 82 bcf that analysts and traders had expected.

  After a frigid winter depleted natural-gas supplies, inventories are now just 14% below the five-year average level
for the week. Production has been much stronger than anticipated this summer, while demand for gas-powered electricity
to fuel air-conditioning units has been muted.

  Traders are now looking ahead to fall, when demand typically falls further and inventories can rebuild at a faster
pace ahead of the winter heating season.

  Forecasts call for some hotter-than-average weather in the next 11 to 15 days, but the "overall demand situation
remains low as the forecast moves into fall," said Bethesda, Md.-based forecaster Commodity Weather Group LLC.

  Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.80/mmBtu, according
to Intercontinental Exchange Inc., versus Thursday's average of $3.9281/mmBtu.

  Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded between $2.11 and $2.19/mmBtu,
compared with $2.5258/mmBtu Thursday.


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


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  (END) Dow Jones Newswires

  September 12, 2014 09:30 ET (13:30 GMT)

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

091214 13:30 -- GMT
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