Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Continues Four-Day Winning Streak


   By Nicole Friedman


  NEW YORK--Natural gas rose Friday for a fourth straight day, erasing some of the contract's monthly losses, as
traders expected colder weather to boost demand for the heating fuel.

  Winter is the highest-demand season for natural gas, which half of U.S. households use as a primary heating fuel.
Though forecasts had been calling for moderate temperatures through early November, updated projections are calling for
colder weather.

  The current outlook "sets the stage for more cold air outbreaks for the Midwest, East and South as the calendar heads
toward mid-November," said Bethesda, Md.-based forecaster Commodity Weather Group LLC in a note Friday.

  Natural gas for December recently rose seven cents, or 1.8%, to $3.897 a million British thermal units on the New
York Mercantile Exchange. Prices fell below $3.60/mmBtu earlier this month.

  "Prices are moving decidedly higher this morning as colder changes in the weather forecasts motivate seasonal
buyers," said Teri Viswanath, director of commodity strategy of natural gas for BNP Paribas SA, in a note. "The abrupt
change in the forecasts has seemingly provided an excuse for these investors to initiate an early seasonal bet on the
winter ahead."

  At the same time, natural-gas production has been particularly robust and output growth is expected to continue.
Producers put 87 billion cubic feet of natural gas into storage last week, according to the U.S. Energy Information
Administration, more than the 85 bcf increase analysts and traders had expected.

  Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.685/mmBtu, according
to Intercontinental Exchange Inc., versus Thursday's average of $3.7414/mmBtu.

  Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $2.80/mmBtu, compared with
$2.8089/mmBtu Thursday.


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


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  (END) Dow Jones Newswires

  October 31, 2014 09:52 ET (13:52 GMT)

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