Dow Jones - End of Day Natural Gas Commentary

DJ Natural-Gas Futures Little Changed After Day's Wild Ride

  By Christian Berthelsen


  Natural-gas prices ended little changed Thursday despite a wild ride during the trading session.

  Natural gas for November delivery was down in early trade but jumped 3% from the low after weekly U.S. data showed a
smaller increase to stockpiles of the fuel than analysts had expected. The contract then fell back into negative
territory and bounced around for the rest of the day.

  Analysts and traders said the rally was likely due to traders closing bearish bets against the market after the data
missed expectations, rather than a fundamental shifting view on the market based on supply-demand dynamics.

  "We had a nice rally up and a big selloff. It's like it never happened," said Scott Gettleman, an independent trader
on the Nymex floor. "There was a legitimate reason for the selloff, because it wasn't a real rally to begin with."

  The November contract ended down 1 cent, or 0.3%, at $3.845 a million British thermal units on the New York
Mercantile Exchange.

  The U.S. Energy Information Administration said gas stockpiles rose 105 billion cubic feet in the week ended Oct. 3,
compared with the average analysts' projection of 108 billion cubic feet added. The increase brings total inventories
to 3.205 trillion cubic feet, 10.1% lower than year-ago levels and 10.5% below average.

  Still, the data weren't far off estimates and reflected continued robust gas production and limited demand given mild
weather that has failed to drive the need for either gas-fired cooling or heating. It was the 25th consecutive increase
in stored inventories, and the stockpile increase was 25% bigger than average.

  The steadily increasing stockpiles have eased worries that U.S. supplies wouldn't be adequate for the 2014-15 winter.
Those concerns had kept gas prices above $4.20/mmBtu for much of this year, though they have traded in a general range
of $3.80 to $4/mmBtu since mid-July.

  Forecasts are calling for above-normal temperatures through much of October throughout the U.S., which would further
limit demand for gas-fired heating.

   FUTURES          SETTLEMENT            NET CHANGE
   Nymex November   $3.845                -1.0c
   Nymex December   $3.937                -1.4c
   Nymex January    $4.023                -1.4c

   CASH HUB         RANGE                     PREVIOUS DAY
   El Paso Perm     $3.73-$3.77               $3.77-$3.80
   El Paso SJ       $3.7350-$3.80             $3.77-$3.79
   Henry Hub        $3.84-$3.90               $3.86-$3.91
   Katy             $3.82-$3.87               $3.86-$3.90
   SoCal            $3.94-$4.03               $3.96-$4.085
   Tex East M3      $1.75-$1.85               $1.86-$1.98
   Transco 65       $3.80-$3.845              $3.85-$3.88
   Transco Z6       $1.75-$1.86               $1.95-$2.02
   Waha             $3.77-$3.80               $3.82-$3.85


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


Subscribe to WSJ: http://online.wsj.com?mod=djnwireshttp://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires
>

  (END) Dow Jones Newswires

  October 09, 2014 16:10 ET (20:10 GMT)

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

100914 20:10 -- GMT
------