Dow Jones - End of Day Natural Gas Commentary

DJ Natural-Gas Prices Fall on Soft Demand Outlook


By Timothy Puko

  Natural gas closed at a three-week low with comfortable weather and a soft demand outlook continuing to put pressure
on prices.

  The front-month November contract settled down 10 cents, or 2.3%, to $3.816 a million British thermal units on the
New York Mercantile Exchange. It equaled the closing price of Sept. 23, the lowest close from the past month.

  One trader was trying to unload put options Tuesday morning and that eventually prompted a flat market to turn
downward, said Michael Doyle, a broker at Eclipse International Inc. in New York.

  "The weather is going to get warmer now, so when that happened, nobody was stepping up to take what was coming
through," Mr. Doyle said.

  Unseasonably warm weather is going to cover most of the country through the end of the month, according to MDA
Weather Services. It forecasts temperatures as much as 15-degrees-Fahrenheit above normal in some parts of the country,
especially the Rockies.

  Natural-gas prices are closely connected to the weather. The fuel heats half of all U.S. homes, making the winter the
peak for its demand, according to the U.S. Energy Information Administration. Without cold weather to drive demand, gas
prices shouldn't push past $4/mmBtu, Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates
in Houston, said in a note.

  Prices have largely stayed between $3.80/mmBtu and $4/mmBtu since mid-July. Record supply has capped prices, but some
traders have also been pushing to add a risk premium in case demand spikes cause prices to shoot up in an extremely
cold winter.

  Jim Ritterbusch said Tuesday that it was difficult to advise clients to buy or sell in this environment. Mr.
Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said prices are likely to stay in the range
around $4/mmBtu through the end of the month and probably into November.
FUTURES                    SETTLEMENT               NET CHANGE

Nymex November             $3.816                       -10c

Nymex December             $3.90                        -10.4c

Nymex January              $3.98                        -10c


CASH HUB                   RANGE                         PREVIOUS DAY

El Paso Perm               $3.735 -$3.765                $3.72-$3.80

El Paso SJ                 $3.74-$3.77                   $3.725-$3.765

Henry Hub                  $3.86-$3.935                  $3.855-$3.88

Katy                       $3.79-$3.85                   $3.75-$3.79

SoCal                      $3.91-$4.03                   $3.93-$4.045

Tex East M3                $2.04-$2.135                  $1.90-$2.03

Transco 65                 $3.83-$3.87                   $3.81-$3.84

Transco Z6                 $2.10-$2.18                   $1.98-$2.085

Waha                       $3.76-$3.775                  $3.71-$3.71

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


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  (END) Dow Jones Newswires

  October 14, 2014 14:59 ET (18:59 GMT)

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

101414 18:59 -- GMT
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