Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Prices Snap Four-Session Losing Streak


   By Nicole Friedman


  NEW YORK--Natural-gas prices gained on Friday but still posted a large weekly loss, as traders weighed expectations
for cold weather against a stronger-than-expected increase in stockpiles.

  Producers added 40 billion cubic feet of natural gas to storage, the U.S. Energy Information Administration said on
Friday. Analysts and traders surveyed by The Wall Street Journal had expected a gain of 38 bcf.

  A frigid winter last year depleted natural-gas stockpiles amid record demand for gas-powered heating in homes and
offices. About half of U.S. households use natural gas as their primary heating fuel.

  Supplies have rebuilt rapidly this year as production exceeded expectations. As of Nov. 7, supplies stood 6.2% below
the five-year average level for this time of year.

  However, November is typically the time of year when the weekly inventory report starts showing drawdowns from
stockpiles rather than increases.

  With cold weather expected to last through next week, the next storage report could show the first withdrawal of the
season, said Frank Clements, co-owner of Meridian Energy Brokers Inc.

  Natural gas for December delivery rose 4.3 cents, or 1.1%, to settle at $4.020 a million British thermal units on the
New York Mercantile Exchange. Friday was the first day of gains after four sessions of losses. Prices fell 8.9% on the
week, the largest weekly loss since February.

  "The cold weather is preventing the market from really collapsing," Mr. Clements said. Because of the early cold
snap, "people are going to start thinking, 'Maybe we're going to have a colder winter,' and that's going to bring us
back up."

  A cold snap is expected to last through the coming week in the Midwest and East Coast, though temperatures are
forecast to warm up in the next 11 to 15 days.

  "The next two inventory reports will be more reflective of the cold blast," said Dominick Chirichella, analyst at the
Energy Management Institute, in a note.

   FUTURES           SETTLEMENT           NET CHANGE
   Nymex December    $4.020               +4.3c
   Nymex January     $4.129               +4.0c
   Nymex February    $4.103               +3.6c

   CASH HUB          RANGE                PREVIOUS DAY
   El Paso Perm      $4.0175-$4.13        $4.11-$4.15
   El Paso SJ        $4.045-4.10          $4.13-4.16
   Henry Hub         $4.00-$4.08          $4.10-$4.20
   Katy              $3.92-$4.03          $4.09-$4.15
   SoCal             $4.20-$4.35          $4.24-$4.33
   Tex East M3       $3.44-$4.72          $3.78-$4.35
   Transco 65        $4.03-$4.08          $4.135-$4.205
   Transco Z6        $3.50-$4.00          $3.90-$4.25
   Waha              $3.99-$4.06          $4.13-$4.22


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


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  (END) Dow Jones Newswires

  November 14, 2014 15:23 ET (20:23 GMT)

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

111414 20:23 -- GMT
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