Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Eases on Demand Outlook


   By Nicole Friedman


  NEW YORK--Natural-gas futures reversed Monday's gains as the market focused on expectations for tepid demand in the
next two weeks.

  Prices climbed Monday after a fatal explosion shut down a pipeline that feeds the hub where the Nymex contract is
priced, prompting traders to bet on lower supplies.

  However, futures pared gains Tuesday as traders looked ahead to moderate weather in the next two weeks, which isn't
expected to cause high demand for natural gas either as a power-generation fuel to power air conditioners or as a
heating fuel.

  Natural gas for October delivery recently fell 5.6 cents, or 1.4%, to $3.875 a million British thermal units on the
New York Mercantile Exchange.

  "Other than the minor pipeline disruption ... that had little impact on production, we saw no particular impetus
behind yesterday's price advance," said energy-advisory firm Ritterbusch & Associates in a note. "We look for
yesterday's gains to be virtually negated by tomorrow."

  Temperatures are expected to be cooler than normal in the eastern U.S. and hotter than average in the West in the
next two weeks.

  With low demand expected, traders are anticipating that producers will inject more natural gas into storage.

  "With cooling demand now tapering, inventory restocking has once again reaccelerated," said Teri Viswanath, director
of commodity strategy for natural gas at BNP Paribas SA, in a note.

  Natural-gas stockpiles were depleted by a long winter, but storage levels have rebuilt much faster than expected amid
robust production and moderate summer weather. As of Sept. 5, supplies stood just 14% below the five-year average for
the week.

  Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.86/mmBtu, according
to Intercontinental Exchange Inc., versus Monday's average of $3.9085/mmBtu.

  Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $2.57/mmBtu, compared with
$2.5587/mmBtu Monday.


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


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  (END) Dow Jones Newswires

  September 16, 2014 09:49 ET (13:49 GMT)

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091614 13:49 -- GMT
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