DJ Natural Gas Losing Streak Hits Fifth Session
By Timothy Puko
Natural-gas prices are falling Friday as the market keeps absorbing data from Thursday that suggested a larger glut
of gas than expected.
Natural gas for July delivery fell 3.8 cents, or 1.4%, at $2.668 a million British thermal units on the New York
Mercantile Exchange. Gas has lost ground every day this week and has fallen nearly 12% since it closed at a four-month
high on May 15.
The worst of those losses came Thursday when U.S. inventory data showed supplies rose 112 billion cubic feet last
week, 13% more than expected. That suggests the market was oversupplied by 2 bcf to 3 bcf a day last week, or about 3%
of production, Tudor, Pickering, Holt & Co., an energy investment bank in Houston, said in a note on Friday.
The data vindicates many traders and analysts who warned that early May's bull run was overly optimistic. Production
is still at near-record levels, and boosts to demand appear temporary. Hot weather that drove demand for gas-fired
power to run air conditioners is receding, and nuclear-power plants that shutdown because of damage or maintenance are
coming back online, cutting into the power sector's gas consumption. Many believe that gas production has leveled off
from last year's rampant growth, but it could be months before that translates into a more balanced market.
"It looks like all the (sellers) might turn out to be right," said Scott Gettleman, an independent trader in New
York. "Everything points lower."
Gas did briefly make gains in electronic trading early Friday, likely from bearish betters cashing out and taking
profits after Thursday's losses, Mr. Gettleman said. The fact that gas didn't get more of a rebound from those traders
or from bargain-seeking buyers signals prices could fall even further by the end of Friday's session, Jim Ritterbusch,
president of energy-advisory firm Ritterbusch & Associates said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.63/mmBtu, compared with Thursday's
range of $2.71-$2.785. Cash prices at the Transco in New York traded in a bid-ask range of $2.25/mmBtu to $2.38/mmBtu,
compared with Thursday's range of $1.85 to $2.35.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
May 29, 2015 09:54 ET (13:54 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
052915 13:54 -- GMT
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