Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Bounces After Prior-Day Selloff



  By Christian Berthelsen


  Natural-gas prices bounced off a two-week low on Friday as updated weather forecasts called for a
colder-than-expected blast over much of the middle of the U.S. next week.

  The front-month April contract for natural gas was up 3.2 cents, or 1.2%, at $2.7290 a million British thermal units
on the New York Mercantile Exchange. Prices in the market have fallen more than 8% in the past week as withdrawals from
gas in storage to meet heating demand fell less than expected.

  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, compared with the 241-bcf draw that was predicted in a survey of analysts and traders by
The Wall Street Journal.

  Though a late-winter blast of cold air is driving demand, it has been more than made up for by surging gas
production, which rose for 11 straight months to end of last year. Total stored supplies are 42% above year-ago levels
and just 1.5% below average for this time of year.

  "The April contract is trying to get back onto its feet," research consultancy Schneider Electric said in a note.
"Updated weather outlooks continue to tilt bullish for demand, while record production continues to lean bearish for
supply."

  Commodity Weather Group said a massive cold front of below-normal temperatures for the middle of next week through
the latter half of next week was strengthening, covering much of the Midwest and the South and reaching into the
Northeast.

  In physical markets, natural gas for next-day delivery at the benchmark Henry Hub in Louisiana last traded at $2.78 a
million Btus, below Thursday's range of $3.00-$3.15. Natural gas for next-day delivery at the Transco Z6 hub in New
York last traded at $3.50 a million Btus, below Thursday's range of $14.50-$17.00.


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


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  (END) Dow Jones Newswires

  February 27, 2015 10:07 ET (15:07 GMT)

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

022715 15:07 -- GMT
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