Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Hits 12-Week High on Technical Rally


   By Timothy Puko


  NEW YORK--Natural-gas prices jumped Wednesday with technical traders adding to a rally that started on expectations
of a cold winter.

  Natural gas for November delivery is up 5.6 cents, or 1.4%, at $4.177 a million British thermal units on the New York
Mercantile Exchange. The market hit its highest intraday price since July 10, when prices peaked at $4.193/mmBtu.

  More technical buyers are likely jumping in as gas settles into a third session above the 32-cent range it traded in
nearly all summer, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. The
November contract peaked several times at or near $4.10/mmBtu, and getting above that creates momentum for higher
prices, Mr. Cooper said.

  "As you hold above previous resistance levels, they become support and actually kind of bullish," he added.

  Prices have trended upward now for more than a week, a rally that started based on expectations for high winter
demand. Several traders believe prices have to go higher to prepare for the peak home-heating season, especially after
last year's historically cold winter led to price spikes above $6/mmBtu.

  MDA Weather Services did forecast on Tuesday a colder-than-normal winter, but one "well short" of last year's
extremes. The worst cold will be primarily concentrated in the Midwest and Southeast and the winter is likely to be
only the eighth coldest since 2000.

  "As the winter progresses cold air anomalies and threats are expected to increase moving into January and then
February," the Maryland-based weather service said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $4.13/mmBtu, compared with Tuesday's
range of $4.105-$4.155. Cash prices at the Transco Z6 hub in New York last traded at $2.25/mmBtu, compared with
Tuesday's range of $2.05 to $2.17.


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


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  (END) Dow Jones Newswires

  October 01, 2014 09:34 ET (13:34 GMT)

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