Dow Jones - Post-Report Commentary

DJ Natural Gas Holds Losses on Larger-Than-Expected Supply Gain


   By Nicole Friedman


  NEW YORK--Natural-gas prices stayed lower Thursday after weekly government data showed that supplies grew more than
expected last week.

  Producers added 97 billion cubic feet of natural gas into storage in the week ended Sept. 19, the U.S. Energy
Information Administration said Thursday. Analysts and traders surveyed by The Wall Street Journal had called for a
92-bcf injection. The addition was larger than any of the survey projections.

  Though natural-gas supplies were largely depleted by record demand for the heating fuel last winter, inventories have
rebuilt unusually quickly this spring and summer. Production has been higher than expected, and mild weather has kept
demand low for gas-powered electric air-conditioning.

  As of Sept. 19, stocks stood at 2.988 trillion cubic feet, 13% below the five-year average for the week.

  However, prices pared losses after the report's release despite the larger-than-expected build.

  Natural gas for October delivery recently traded down 5 cents, or 1.3%, to $3.861 a million British thermal units on
the New York Mercantile Exchange.

  With the October contract set to expire Friday and the October options contract expiring at settlement Thursday,
traders may be looking ahead to the winter heating season, said Tom Saal, a broker at INTL FCStone Latin America in
Miami.

  "In the next week, November will be the spot month," he said. "You're transitioning into the demand season."

  Moderate weather has kept natural-gas prices within a range between $3.75 and $4/mmBtu for most of the summer.

  "People are looking ahead to winter," said John Woods, president of JJ Woods Associates and a Nymex floor trader. But
"we're centered right where we should be."


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


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  (END) Dow Jones Newswires

  September 25, 2014 11:18 ET (15:18 GMT)

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092514 15:18 -- GMT
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