Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Inches Up as Production Data Tapers Off

  By Christian Berthelsen


  Natural-gas futures inched up Monday as investors looked past bearish near-term demand indicators to focus on an
apparent pullback from recent production levels.

  Natural gas for July delivery rose 0.7 cent, or 0.3%, to $2.649 a million British thermal units on the New York
Mercantile Exchange. The slight gain ended a five-session losing streak.

  The U.S. Energy Information Administration and private data groups said pipeline data and other indicators suggest
the industry is beginning to cut production. The EIA said in a monthly report that production fell in March for the
second time this year, and research consultancy Gelber & Associates said gas flow data on pipelines has been showing
declines.

  Still, analysts expect the EIA's weekly inventory data to show a major increase when released Thursday. "Production
is still near record highs," Gelber said in a note. "The sentiment continues to be bearish."

  Natural-gas prices have retreated more than 10% from recent highs reached in May as gas production remains robust and
forecasts for above-normal temperatures have faded.

  "The market seemed to shift its focus back to the fundamentals and the persistent supply overhang," Barclays said in
a note. "From a purely fundamental standpoint, we still expect prices to drift lower."

  Commodity Weather Group said weekend revisions to last week's forecast now call for below-normal temperatures in the
Northeastern U.S. in the coming days and milder-than-expected weather into the middle of June.

  Weekly U.S. gas inventory data last week showed the U.S. added 112 billion cubic feet of gas to storage in the week
ended May 22, bringing total stockpiles to 2.1 trillion cubic feet and nearly eliminating the huge deficit created
after last year's severe winter for gas-fired heating demand. Inventories now stand less than 1% below average for this
time of year, and some analysts expected stockpiles to flip to a surplus soon.

   FUTURES           SETTLEMENT           NET CHANGE
   Nymex July        $2.649               +0.7c
   Nymex August      $2.677               +1.2c
   Nymex September   $2.689               +1.4c

   CASH HUB          RANGE                PREVIOUS SESSION
   El Paso Perm      $2.35-$2.385         $2.405-$2.46
   El Paso SJ        $2.37-$2.39          $2.41-$2.45
   Henry Hub         $2.59-$2.6225        $2.58 -$2.71
   Katy              $2.52-$2.62          $2.56 -$2.61
   SoCal             $2.49-$2.53          $2.55-$2.57
   Tex East M3       $1.24-$1.40          $1.27-$1.40
   Transco 65        $2.565-$2.6125       $2.5375-$2.63
   Transco Z6        $2.24-$2.50          $2.10 -$2.30
   Waha              $2.45-$2.465         $2.50 -$2.50


  Write to Christian Berthelsen at christian.berthelsen@wsj.com


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  (END) Dow Jones Newswires

  June 01, 2015 16:15 ET (20:15 GMT)

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

060115 20:15 -- GMT
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