Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Futures Fall as Demand Outlook Weakens


   By Christian Berthelsen


  Natural gas futures extended losses Tuesday as forecasts for an East Coast heat wave faded, dashing expectations for
a bout of gas-fired cooling demand.

  Natural gas for June delivery settled down 6.5 cents, or 2.3%, at $2.822 a million British thermal units on the New
York Mercantile Exchange. The June contract expires Wednesday.

  The loss prolonged last week's slide, as concerns about robust production and more than adequate supplies prompt the
market to give back gains made in early May.

  The May rally was driven by hotter-than-average temperatures that were expected to provide a boost for natural gas
demand to generate power and run air conditioning. But the most recent forecasts show that trend beginning to moderate,
with a spate of much-above normal temperatures in the Northeast fading in the coming days and predictions for renewed
heat into early June losing strength, according to forecaster Commodity Weather Group.

  Soaring natural gas production has helped to almost fully restore supplies that were severely depleted by the harsh
cold of the 2013-2014 winter season. Domestic inventories are now just 1.7% below average for this time of year, and
analysts expect the market could flip to a surplus by next month. Hedge funds and other money managers remain bearish
overall on the contract, according to data from the U.S. Commodity Futures Trading Commission released Friday.

  "The market needs every ounce of demand right now to combat elevated production," said Aaron Calder, an analyst with
Houston research consultancy Gelber & Associates.

   FUTURES           SETTLEMENT       NET CHANGE
   Nymex June          $2.822          -6.5c
   Nymex July          $2.849          -7.0c
   Nymex August        $2.864          -7.0c

   CASH HUB             RANGE          PREVIOUS SESSION
   El Paso Perm       $2.45-$2.48          $2.48-$2.57
   El Paso SJ         $2.44-$2.48          $2.52-$2.56
   Henry Hub          $2.81-$2.83          $2.86-$2.91
   Katy               $2.73-$2.82          $2.81-$2.93
   SoCal              $2.57-$2.59          $2.68-$2.72
   Tex East M3        $1.685-$1.80         $1.52-$1.625
   Transco 65         $2.81-$2.85          $2.875-$2.925
   Transco Z6         $2.80-$2.95          $1.88-$2.08
   Waha               $2.60-$2.64          $2.67-$2.69


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  (END) Dow Jones Newswires

  May 26, 2015 15:08 ET (19:08 GMT)

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

052615 19:08 -- GMT
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