Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Seeing Rebound From Lowest Point Since 2012


   By Timothy Puko


  Natural gas prices are inching up for a second straight session as brokers and traders say the small moves are just a
rebound from when gas hit its lowest point since 2012 earlier this week.

  Natural gas for June delivery is up 2.5 cents, or 1%, at $2.562 a million British thermal units on the New York
Mercantile Exchange. Gas is up 2.9% since it closed at $2.49/mmBtu on Monday, its lowest settlement since June 15,
2012.

  Much of the move is simply a reaction to hitting that low. Bets on falling prices have been outnumbering bets on
rising prices by more than 3 to 2 in recent weeks, making it a crowded trade that dissuades others from selling more,
analysts said. Gas has also rebounded from multi-year lows a few times this year, and so some traders who move based on
charts and momentum are buying because they expect that pattern to repeat now, said Frank Clements, co-owner of
Meridian Energy Brokers Inc. outside New York.

  "It's this two-steps-down-one-step-back mentality right now," and it gets people who bet against prices to close out
those bets and lock in profits by buying back contracts they once sold, Mr. Clements said. "Take what the market's been
giving you."

  Weather forecasts have changed little and the spring season usually brings comfortable temperatures that damp demand
for energy to heat or cool homes. Trading has been minimal and the small moves of the past two days are ultimately "of
no consequence," said Dean Hazelcorn, trader at the brokerage Coquest Inc. in Dallas.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.55/mmBtu, compared with Tuesday's
range of $2.5175-$2.56. Cash prices at the Transco Z6 hub in New York last traded at $2.45/mmBtu, compared with
Tuesday's range of $2.40 to $2.43.


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


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  (END) Dow Jones Newswires

  April 29, 2015 09:54 ET (13:54 GMT)

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042915 13:54 -- GMT
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