Dow Jones Natural Gas - Prices Fall Despite Larger Than Expected Storage Withdrawal

DJ Natural-Gas Prices Fall Despite Larger-Than-Expected Storage Withdrawal


  By Timothy Puko


  Natural-gas futures slipped Thursday after news that stockpiles fell last week by nearly 30% less than they usually
do at this time of year.

  The front-month January contract settled down 7.2 cents, or 1.9%, at $3.634 a million British thermal units on the
New York Mercantile Exchange. It is only 2% above the low closing price of the year set Oct. 27, $3.561/mmBtu.

  Storage levels shrank by 51 billion cubic feet in the week ended Dec. 5, the U.S. Energy Information Administration
said. That was less than the 72 bcf drain for this week a year ago and below the 92-bcf five-year average, likely
because unseasonably warm weather led to softer demand for heating, analysts said.

  Prices initially went up on the news because the drain was larger than the 6 bcf expected by analysts and brokers
surveyed by The Wall Street Journal. But they flipped back to losses before noon, within an hour of the EIA update.

  Weather forecasts are still unseasonably warm for most of the country through Christmas, and it has widely softened
demand expectations, analysts and brokers said. Many traders want to bet on the falling price of gas and were eager to
resume short-selling when they could start from a better price, said Jim Ritterbusch, president of energy-advisory firm
Ritterbusch & Associates.

  "Traders...were waiting to pounce all over a bullish report," he added.

  The drain brought storage levels to 3.4 trillion cubic feet, 9.4% lower than the five-year average, and 5.2% lower
than levels at this time last year. Analysts have said that weather appears to be staying warm for long enough that
small withdrawals could close that deficit to last year before January.


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


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  (END) Dow Jones Newswires

  December 11, 2014 15:06 ET (20:06 GMT)

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121114 20:06 -- GMT