Dow Jones Natural Gas - Prices Hit Multi-Year Low Ahead of Inventory Data

DJ Natural Gas Hits Multi-Year Low Ahead of Inventory Data

By Timothy Puko and Nicole Friedman

  Natural-gas prices slid to a more-than-two-year low Wednesday ahead of weekly inventory data, which is expected to
show that inventories shrank last week by a smaller amount than is typical for this time of year.

  Natural gas for March delivery settled down 9.2 cents, or 3.3%, at $2.662 a million British thermal units on the New
York Mercantile Exchange, the lowest settlement price since Aug. 29, 2012. The market has tumbled in five of the past
six sessions, bringing a quick end to a rally that took off after weather updates at noon on Tuesday.

  Half of U.S. homes use natural gas for heat, and severe winter cold can push demand for gas to record levels. But
production has been so strong in the past year that consumption has failed to prop up prices.

  Analysts and traders expect the U.S. Energy Information Administration to report Thursday that natural-gas
inventories fell by 122 billion cubic feet in the week ended Jan. 30, according to a Wall Street Journal survey.

  The estimate for Jan. 30 is less than the 259 bcf drained from storage for the same week last year and less than the
165-bcf five-year average drain for that week.

  Some of Wednesday's forecasts still show abnormally cold weather covering the eastern half of the country in
mid-February, with severe cold in the Northeast. But others are predicting a more moderate cold spell, leaving traders
unconvinced, Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in a note.

  "We do have very oversold conditions, but from the same standpoint, we're now so far into February ... that natural
gas bulls are running out of winter," said Stephen Schork, editor of energy trade publication the Schork Report. "As
each day goes, the odds of a severe winter event pushing up prices diminishes significantly."
FUTURES          SETTLEMENT   NET CHANGE
Nymex March       $2.662       -9.2c
Nymex April       $2.669       -8.8c
Nymex May         $2.697       -8.4c

CASH HUB             RANGE                    PREVIOUS SESSION
El Paso Perm      $2.33-$2.41                 $2.33-$2.3575
El Paso SJ        $2.395-$2.4175              $2.34-$2.38
Henry Hub         $2.68-$2.755                $2.655-$2.70
Katy              $2.57-$2.65                 $2.58-$2.49
SoCal             $2.49-$2.52                 $2.45-$2.4775
Tex East M3       $6.05-$6.80                 $3.10-$3.35
Transco 65        $2.675-$2.75                $2.63-$2.68
Transco Z6        $12.00-$13.50               $3.61-$3.85
Waha              $2.50-$2.5425               $2.45-$2.48


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

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  (END) Dow Jones Newswires

  February 04, 2015 15:17 ET (20:17 GMT)

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

020415 20:17 -- GMT
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