Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Slumps on Smaller-Than-Expected Storage Draw


   By Timothy Puko and Nicole Friedman


  Natural-gas prices sank to a two-week low Thursday after data showed weekly inventories fell far less than expected
last week.

  U.S. natural-gas stockpiles fell by 219 billion cubic feet in the week ended Feb. 20, the U.S. Energy Information
Administration said Thursday. Analysts and traders surveyed by The Wall Street Journal had expected a 241-bcf drawdown,
and the smallest forecast was for a 226-bcf draw.

  Natural gas for April delivery plummeted immediately and settled down 16.5 cents, or 5.8%, at $2.697 a million
British thermal units on the New York Mercantile Exchange. It was the largest percentage loss since Jan. 20 and the
lowest settlement since Feb. 10.

  "The fact that (natural) gas could not move significantly higher ... despite record cold temps, tells me the thing is
going lower," said Tim Rudderow, president of Mount Lucas Management, who oversees $1.6 billion.

  With the end of winter nearing, traders are essentially ignoring the strong demand and shrinking stockpiles, said
Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York.

  Production grew for 11 straight months to end last year, and analysts expect growth to keep going in 2015. The
coldest winter in 30 years may simply have kept prices from falling faster, Mr. Clements said.

  "You're not pulling as much gas out of storage as you would historically, with this cool weather," said Donald
Morton, senior vice president at Herbert J. Sims & Co. "Production's still strong."


  Write to Nicole Friedman at nicole.friedman@wsj.com and Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  February 26, 2015 14:49 ET (19:49 GMT)

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

022615 19:49 -- GMT
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