Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Futures Edge Down as Rally Fades


   By Christian Berthelsen


  Natural gas futures edged lower on Tuesday as forecasts for extreme cold eased and traders continued to take profits
from the recent rally that drove prices up by more than 23%.

  Natural gas for December fell 0.8 cent to $4.247 a million British thermal units, closing lower for the second day in
a row after a nine-session rally. Analysts said the run-up was overdone and the market was due to revert to more normal
levels until traders can develop a better sense of the coming heating season.

  The recent run-up was prompted by forecasts for a late but severely cold start to the fall and winter heating season,
with the appearance of a polar vortex over a swath of the middle of the U.S. Those cold temperatures emerged Tuesday,
but updated forecasts showed the area covered by the weather formation would contract and the temperatures would
moderate.

  "U.S. weather models have shifted warmer," research consultancy Gelber & Associates said in a note. "This pause in
the frigid weather pattern will allow pleasant temperatures around Thanksgiving, making it difficult for exorbitant gas
prices to persist."

  Producers and utilities have rebuilt stored gas inventories that were depleted by last year's severe winter, with
stockpiles now standing at nearly 3.6 trillion cubic feet--a level analysts say should be adequate to get through the
coming fall and winter heating season, though it remains slightly below year-ago and average levels.

  Analysts are expecting another large addition to stored supplies in U.S. data to be released later this week, though
it may be the last of the season, with this week's cold front expected to begin driving heating demand. The U.S. Energy
Information Administration will release its weekly storage data on Friday instead of Thursday, delayed by the Veterans
Day holiday.

   FUTURES            SETTLEMENT    NET CHANGE
   Nymex December    $4.247            -0.8c
   Nymex January     $4.344            -0.7c
   Nymex February    $4.305           unchanged

   CASH HUB        RANGE            PREVIOUS DAY
   El Paso Perm    $4.07-$4.15     $4.10-$4.18
   El Paso SJ      $4.0750-4.14    $4.10-$4.205
   Henry Hub       $4.02-$4.16     $4.065-$4.25
   Katy            $4.05-$4.135    $3.96-$4.10
   SoCal           $4.26-$4.35     $4.34-$4.40
   Tex East M3     $3.65-$3.79     $3.47-$3.68
   Transco 65      $4.04-$4.14     $4.11-$4.18
   Transco Z6      $3.67-$3.79     $3.49-$3.65
   Waha            $4.05-$4.13     $4.10-$4.20


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


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  (END) Dow Jones Newswires

  November 11, 2014 15:17 ET (20:17 GMT)

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

111114 20:17 -- GMT
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