Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Holds Steady Before Storage Update




  By Timothy Puko


  Natural-gas prices are holding steady as the market enters its calmest trading since December ahead of an influential
update on inventories.

  Natural gas for April delivery gained 1.5 cents, or 0.6%, to $2.738 a million British thermal units on the New York
Mercantile Exchange. The more actively traded May contract is up 1.5 cents, or 0.6%, at $2.755/mmBtu. April options
expire at the end of Thursday's trading and the April contract expires at the end of Friday's trading.

  Both volume and volatility are exceptionally light for a contract this close to expiration, said Dean Hazelcorn,
trader at the brokerage Coquest Inc. in Dallas. Trading has stayed within a 4-cent range on both contracts.

  The market "is not doing anything," Mr. Hazelcorn said. "We are trapped."

  The shale-gas boom has flooded the market with record production able to overwhelm all but the most extreme demand.
That has damped volatility as spring weather has approached, reducing the likelihood a long winter of extreme cold
could cause enough demand to absorb all the supply.

  Thursday morning is usually a day of light trading, too, ahead of the U.S. Energy Information Agency's weekly update
on storage levels, due at 10:30 a.m. EDT. Traders usually consolidate ahead of the data to avoid getting caught in bad
positions.

  They expect a 10-billion-cubic-feet addition to stockpiles for the week that ended March 20, according to The Wall
Street Journal's survey of 18 brokers and traders. Demand for heating fuel usually causes stockpiles to drop through
the end of March, but this year's potentially early start for stockpile additions could encourage a selloff, analysts
have said.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.7475/mmBtu, compared with
Wednesday's range of $2.73-$2.79. Cash prices at the Transco Z6 hub in New York traded in a bid-ask range of
$2.67/mmBtu to $2.80/mmBtu, compared with Wednesday's range of $2.50 to $2.70.


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


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  (END) Dow Jones Newswires

  March 26, 2015 09:41 ET (13:41 GMT)

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

032615 13:41 -- GMT
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