Dow Jones - Morning Natural Gas Commentary

DJ Natural Gas Holds with Traders Divided on Demand


   By Timothy Puko


  NEW YORK--Natural gas is flip-flopping around the unchanged line Tuesday with traders still divided between a lack of
short-term demand and the risk of strong demand coming later in the winter.

  Natural gas for November delivery inched up 0.8 cent, or 0.2%, at $3.906 a million British thermal units on the New
York Mercantile Exchange. Trading has stayed within about a 6-cent range.

  Weather forecasts warmed for a second straight day, suggesting there won't be any rush for early-season heating
demand. That initially pushed the market lower, increasing losses from similar reports Monday, which turned out to be
the market's worst day in a month.

  Prices bounced back following a similar pattern from the last two months. Gas hasn't been able to sustain prices
above $4/mmBtu because of a lack of short-term demand. But it hasn't lingered below $3.90/mmBtu as traders anticipate
the coming winter. Last winter's extreme cold brought record demand and price spikes above $6/mmBtu, and the chance
that could happen again makes sellers hesitate.

  "I don't see the case for a big rally, but the market seems to have a bit more resilience," said Gene McGillian, a
broker and analyst at Tradition Energy. "The reluctance to be short ahead of the winter is still there."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $3.865/mmBtu, compared with Monday's
range of $3.8725-$3.9275. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$1.75-$1.875/mmBtu, compared with Monday's range of $1.8325 to $1.8750.


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


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  (END) Dow Jones Newswires

  October 07, 2014 09:36 ET (13:36 GMT)

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

100714 13:36 -- GMT
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