DJ Natural Gas Prices Surge After Smaller-than-Expected Addition to Stockpiles
By Timothy Puko
Natural gas prices flipped to gains Thursday, hitting their highest point in a month after data showed stockpiles
grew less than expected.
The U.S. Energy Information Administration said storage levels grew by 81 billion cubic feet in the week ended April
24. That is 6 bcf less than the 87-bcf consensus average of forecasters surveyed by The Wall Street Journal.
The EIA update is widely considered one of the best measures of supply and demand for the natural gas market. This
draw would indicate slightly smaller supply or larger demand than expected.
The front-month June contract recently traded up 11.2 cents, or 4.3%, at $2.718 a million British thermal units on
the New York Mercantile Exchange. It had been trading about 1.5% lower to start the session as traders anticipated one
of the biggest ever surpluses on record for April.
The rally pushed prices to $2.732, their highest intraday point since March 26, before easing slightly.
Traders have been betting big in favor of falling prices, according to regulatory figures that track money managers'
trades. There are more than three positions in favor of falling prices for every two positions that would benefit on
rising prices.
Many of those bears have been trying to get out, said Michael Doyle, a broker at Eclipse International Inc. in New
York. And a number that suggested lower supply or higher demand than expected could have amped up that effort.
"It's really a case of too many people on one side of the boat," he said. "If any one person wants to cover, then
it's going to rally like that."
This addition brought storage levels to 1.7 trillion cubic feet, 76% more than a year ago and 4.2% below the
five-year average.
Write to Timothy Puko at Tim.Puko@wsj.com
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(MORE TO FOLLOW) Dow Jones Newswires
April 30, 2015 11:09 ET (15:09 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
043015 15:09 -- GMT
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