DJ Natural Gas Inches Lower as Expectations Grow for Year's Biggest Surplus
By Timothy Puko
Natural-gas prices are inching lower as analysts expect new data coming Thursday to show that producers created the
year's largest surplus last week.
Natural gas for May delivery fell 2.1 cents, or 0.8%, to $2.589 a million British thermal units on the New York
Mercantile Exchange. Trading has stayed within a five-cent range. Calm trading and narrow ranges are common on
Thursdays before the U.S. Energy Information Administration gives its weekly update on storage levels at 10:30 a.m.
EDT.
The EIA data are likely to show a 51 billion-cubic-feet addition to storage, the largest of the year, according to
the average forecast of 14 analysts surveyed by The Wall Street Journal. That is nearly 50% larger than the average
addition for this time of year.
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 arrived, reducing the likelihood that severe cold could cause enough
demand for heating fuel to absorb all of the supply.
Frank Clements, co-owner of Meridian Energy Brokers Inc. outside New York, is telling clients they should stay out of
the market until after the 10:30 a.m. update, and maybe even until the front-month May contract expires later this
month. The market has very little clear momentum and, with volatility low, there is little chance for big gains, he
said.
The market "lost its bearish edge with that rally yesterday," when prices rose off of the lowest point since 2012,
Mr. Clements said. "I think the market is trying to find a little bit of a balance here."
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.575/mmBtu, compared with
Wednesday's range of $2.565-$2.63. Cash prices at the Transco Z6 hub in New York last traded at $2.00/mmBtu, compared
with Wednesday's range of $2.25 to $2.28.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
April 16, 2015 09:43 ET (13:43 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
041615 13:43 -- GMT
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