Dow Jones Natural Gas - Morning Commentary

DJ Natural Gas Slips on Expectations for Big Surplus


   By Timothy Puko


  Natural gas prices are falling as traders anticipate one of the biggest surpluses on record for April.

  Natural gas for May delivery fell 3.9 cents, or 1.5%, at $2.567 a million British thermal units on the New York
Mercantile Exchange.

  Analysts and brokers are expecting data on the way Thursday to show the fourth-largest surplus on record for April, a
time when lingering heating demand usually limits surpluses. The U.S. Energy Information Administration gives its
weekly update on storage levels for the prior week at 10:30 a.m. EDT.

  That "would be mucho larger than last year's 77 Bcf, and mucho, mucho larger than the five-year average of 55 Bcf,"
Matt Smith, an analyst at consultant Schneider Electric SA in Louisville, Ky., said in a note to clients.

  Producers just had the second-highest April surplus last week. Production has been at or near record levels for more
than a year, so it is overwhelming demand that plummets as mild spring weather cuts the need for heat and electricity,
analysts said.

  It is "indicative of a gas market struggling to match demand [with] robust supply," energy investment bank Tudor,
Pickering, Holt & Co. said in a note.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.565/mmBtu, compared with
Wednesday's range of $2.55-$2.565. Cash prices at the Transco Z6 hub in New York last traded at $2.60/mmBtu, compared
with Wednesday's range of $2.37 to $2.46.


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


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  (END) Dow Jones Newswires

  April 30, 2015 09:55 ET (13:55 GMT)

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

043015 13:55 -- GMT
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