DJ Natural Gas Slips Ahead of Expected Big Surplus
By Timothy Puko
Natural gas prices are ticking down Thursday as traders expect one of the biggest weekly surpluses on record.
Natural gas for July delivery is down 2.9 cents, or 1.1%, at $2.606 a million British thermal units on the New York
Mercantile Exchange. Trading has stayed within a 7.5-cent range, a tight range common ahead of the U.S. Energy
Information Administration's weekly update on storage levels, scheduled for 10:30 a.m. EDT.
It is likely to show that storage levels grew by 123 billion cubic feet, according to the median average of 22
forecasters surveyed by The Wall Street Journal. That would be one of the largest storage additions in EIA records that
date back through 1994 and nearly a third higher than the 92-bcf five-year-average addition for this week of the year.
Analysts say that traders have been selling and prices have been falling in anticipation of the large number. It
would suggest the market is oversupplied by about 2 bcf to 3 bcf a day, Tudor, Pickering, Holt & Co., an energy
investment bank in Houston, said in a note on Thursday.
"We feel that a bearish reaction to today's EIA release is much more likely than a bullish response," Jim
Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note. He added that prices could
break below technical support at $2.60/mmBtu.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.585/mmBtu, compared with
Wednesday's range of $2.615-$2.67. Cash prices at the Transco Z6 hub in New York last traded at $1.44/mmBtu, compared
with Wednesday's range of $1.60 to $1.72.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
June 04, 2015 10:02 ET (14:02 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
060415 14:02 -- GMT
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