Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Inches Down as Oversupply Continues


   By Timothy Puko


  NEW YORK--Natural-gas prices inched lower Wednesday, as comfortable weather and soft demand continued to encourage
selling.

  Natural gas for November delivery fell 1.9 cents, or 0.5%, at $3.692 a million British thermal units at the New York
Mercantile Exchange. The market is now down 5.7% since Oct. 13, with Tuesday bringing the only gains in the last seven
sessions.

  Weather forecasts are still showing above-normal temperatures through the end of the month, likely warm enough so
that consumers won't use much natural gas for home heating. Long-term forecasts are largely predicting that cold winter
weather won't arrive before January and if that proves true, prices are likely to stay below $4 for weeks, said Gene
McGillian, an analyst at Tradition Energy.

  "The market is treading water here," he said. "We just don't have any strong demand."

  Demand is weak enough that producers could put a record amount of natural gas into winter storage for mid-October,
Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in a note. That is weighing heavily on
traders Wednesday, she said.

  The U.S. Energy Information Administration will release its weekly update on storage levels at 10:30 a.m. Thursday.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.6925/mmBtu, compared with
Tuesday's range of $3.60-$3.64. Cash prices at the Transco Z6 hub in New York last traded at $2.70/mmBtu, compared with
Tuesday's range of $2.38 to $2.70.


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


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  (END) Dow Jones Newswires

  October 22, 2014 09:45 ET (13:45 GMT)

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102214 13:45 -- GMT
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