DJ Natural Gas Gains Ahead of Cooler Weather
By Nicole Friedman
Natural-gas futures ticked higher Tuesday on expectations that colder-than-average weather in the next two weeks
would boost demand, but prices held near multi-year lows as ample supplies weighed on the market.
Natural gas for May delivery settled up 1.9 cents, or 0.8%, at $2.530 a million British thermal units on the New York
Mercantile Exchange.
Weather forecasts for the next 11 to 15 days released Tuesday called for cooler weather than previously forecast,
which could increase demand for gas-powered indoor heating.
However, heating consumption is typically mild in the spring, keeping prices subdued.
Prices fell to their lowest point in nearly three years last week as robust supplies continued to overwhelm demand,
leading some market participants to forecast a large supply surplus by the beginning of next winter.
"It is too early to tell yet if this will be a true bottom" in prices, said Frank Clements, co-owner of Meridian
Energy Brokers Inc., in a note. "I am thinking this is may be a pause until we head lower."
U.S. gas supplies have started to build up, most recently at 1.476 trillion cubic feet, up 79% from a year ago, when
a severe winter had drained stockpiles. Producers typically inject natural gas into storage between April and October,
then withdraw gas from storage during the winter. The U.S. Energy Information Administration is due to update its
weekly storage data on Thursday.
"Everyone's treading water, waiting to see how big this week's injection's going to be," said Derek Salvino, vice
president of market research at Tradition Energy. "We're just in a holding pattern until we get all the way into
injection season."
Still, there are indications that U.S. production could slow. There were 988 rigs currently drilling for oil and gas
in the U.S. last week, falling below 1,000 for the first time since September 2009. On Monday, the EIA said total
natural-gas production in seven key shale-gas-producing regions would fall by 23 million cubic feet a day in May from
the prior month.
FUTURES SETTLEMENT NET CHANGE
Nymex May $2.530 +1.9c
Nymex June $2.572 +2.4c
Nymex July $2.631 +2.5c
CASH HUB RANGE PREVIOUS SESSION
El Paso Perm $2.30-$2.32 $2.2825-$2.31
El Paso SJ $2.2875-$2.31 $2.27-$2.30
Henry Hub $2.535-$2.58 $2.50-$2.58
Katy $2.48-$2.565 $2.50-$2.545
SoCal $2.40-$2.44 $2.395-$2.42
Tex East M3 $1.58-$1.70 $1.55-$1.73
Transco 65 $2.48-$2.515 $2.475-$2.51
Transco Z6 $2.18-$2.35 $2.00-$2.16
Waha $2.39-$2.40 $2.38-$2.40
Write to Nicole Friedman at nicole.friedman@wsj.com
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(END) Dow Jones Newswires
April 14, 2015 15:08 ET (19:08 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
041415 19:08 -- GMT
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