Dow Jones - Morning Natural Gas Commentary

DJ Natural-Gas Futures Edge Higher With Return of Warm Weather


   By Christian Berthelsen


  Natural-gas prices ticked higher Monday as forecasts for the Northeast turned warm, prompting expectations of
possible late-season cooling demand powered by gas-fired electricity plants.

  Gas for October delivery was up 2.7 cents, or 0.7%, to $3.8640 a million British thermal units on the New York
Mercantile Exchange.

  Outlooks into the start of October for the Northeast and Midwest predict temperatures in the mid-70s, higher than
normal for early autumn. Analysts were skeptical that such temperatures could prompt more demand but pointed to the
trend as a boon for the market in the absence of any other fundamental drivers.

  "The warm weather is heading back to the eastern two-thirds of the country and could result in some additional
natural gas cooling-related demand over the next several weeks," Energy Management Institute analyst Dominick
Chirichella said in a note.

  Producers added 92 billion cubic feet of gas to stored inventories in the most recent data reported by the U.S.
Energy Information Administration, bringing total stockpiles to 2.8 trillion cubic feet, about 14% lower than average
for this time of year. Producers and utilities have been racing to rebuild inventories depleted by the previous severe
U.S. winter and appear on pace to have about 3.5 trillion on hand at the start of heating season -- not as much as last
year but adequate to get through the fall and winter months.

  Physical gas for next-day delivery at the benchmark Henry Hub in Louisiana last traded at $3.8650 a million Btus.
Cash prices for physical gas at the Transco Z6 hub in New York last traded at $2.10 a million Btus.


  Write to Christian Berthelsen at Christian.Berthelsen@wsj.com


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  (END) Dow Jones Newswires

  September 22, 2014 10:04 ET (14:04 GMT)

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

092214 14:04 -- GMT
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