Dow Jones Natural Gas - End Of Day Commentary

DJ Natural Gas Retreats Despite Frigid Forecasts


   By Nicole Friedman


  NEW YORK--Natural-gas prices edged lower Tuesday, reversing earlier gains, on skepticism that colder-than-normal
temperatures would put much of a dent in natural-gas supplies.

  Natural-gas futures for March delivery settled down 4.5 cents, or 1.6%, at $2.759 a million British thermal units.

  About half of U.S. households use natural gas as their primary heating fuel, and frigid weather in recent weeks has
elevated natural-gas demand. However, strong production has counteracted the increase in natural-gas consumption,
limiting fears that stockpiles of the fuel will be depleted this winter as they were last year.

  "More cold now still does not make that much of a difference to the immense oversupply that is still affecting the
market," said Martin King, analyst at FirstEnergy Capital, in a note. "The market has to tread carefully."

  Weather forecasts on Tuesday showed "another very impressive cold shot" in the eastern half of the U.S. this week,
according to forecaster WSI Corp. The forecaster called for below-average temperatures to persist across the Midwest
and East Coast in the next 11 to 15 days.

  "The general mood in the market is, even though we've seen this cold weather, is: How lasting is it going to be?"
said Tom Saal, a broker at INTL FCStone Latin America in Miami.

  Natural-gas prices for next-day delivery spiked in some East Coast locations, as buyers tried to secure immediate
supplies during continued frigid, snowy weather.

  Cash prices at the Transco Z6 hub in New York averaged $37.07/mmBtu on Tuesday, according to Intercontinental
Exchange Inc., up from an average of $17.72 on Friday. Next-day prices at the same hub soared to $90/mmBtu last year.

   FUTURES            SETTLEMENT   NET CHANGE
   Nymex March        $2.759      -4.5c
   Nymex April        $2.779      -3.3c
   Nymex May          $2.819      -3.4c

   CASH HUB           RANGE          PREVIOUS SESSION
   El Paso Perm       $2.48-$2.64    $2.33-$2.47
   El Paso SJ         $2.52-$2.64    $2.33-$2.40
   Henry Hub          $2.90-$2.97    $2.68-$2.77
   Katy               $2.67-$2.85    $2.60-$2.72
   SoCal              $2.6325-$2.69  $2.44-$2.505
   Tex East M3        $16.90-$24.00  $14.00-$22.00
   Transco 65         $2.94-$2.985   $2.71-$2.80
   Transco Z6         $30.00-$42.00  $15.00-$21.00
   Waha               $2.65-$2.77    $2.50-$2.565


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


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  (END) Dow Jones Newswires

  February 17, 2015 14:56 ET (19:56 GMT)

  Copyright (c) 2015 Dow Jones & Company, Inc.

021715 19:56 -- GMT
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