Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Balanced on Mixed Signals


   By Timothy Puko


  NEW YORK--Natural-gas prices are flip-flopping around unchanged as traders see a weekly surplus balanced out by the
chances of a cool fall with increased heating demand.

  Natural gas for October delivery is down 0.4 cents, or 0.1%, at $4.009 a million British thermal units on the New
York Mercantile Exchange. Gas has traded within a 5-cent range, a narrow range common on Thursday mornings as traders
await a weekly storage update from the U.S. Energy Information Administration.

  Analysts expect 89 billion cubic feet of gas were added to stockpiles in the week ended Sept. 12, 25% more than
average for this time of year. EIA will release its update at 10:30 a.m. EDT.

  Those expectations for a large surplus have been balanced out by the weather forecasts on Wednesday and Thursday,
analysts said. Pockets of the East Coast will see unseasonably cool weather, which usually drives demand for more
heating. Washington and Philadelphia could see temperatures as much as 8-degrees-Fahrenheit below normal, according to
MDA Weather Services.

  But even the weather's impact may be mostly psychological, said Gene McGillian, a broker and analyst at Tradition
Energy. At this time of year, mild temperatures normally hold little demand for either gas-fired heating or cooling,
and the swings predicted for the next two weeks aren't likely severe enough to change that, analysts and meteorologists
have said. The early fall weather just has speculators thinking of last year's extreme cold that spiked prices above
$6/mmBtu, Mr. McGillian said.

  "With nervousness about what happened last year, the market is seeing some strength," he said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.97/mmBtu, compared with
Wednesday's range of $3.935-$4.00. Cash prices at the Transco Z6 hub in New York last traded at $2.18/mmBtu, compared
with Wednesday's range of $2.42 to $2.52.


  Write to Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  September 18, 2014 09:48 ET (13:48 GMT)

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

091814 13:48 -- GMT
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