Dow Jones - Natural Gas Falls To One-Month Low On Oversupply

DJ Natural Gas Falls to One-Month Low on Oversupply



  By Timothy Puko and Christian Berthelsen


  Natural-gas futures retreated to small losses and a fresh one-month low Wednesday as analysts don't expect the
weather in the coming days to spur strong demand.

  The front-month August contract settled down 3.1 cents, or 1.1%, to $2.685 a million British thermal units on the New
York Mercantile Exchange. A three-session losing streak has pushed gas below the 18-cent range within which it had
settled every day for the past month.

  Traders and analysts are expecting the weekly storage addition to return to far-above-average levels, after the last
addition missed that mark with smallest addition in two months. The U.S. Energy Information Administration releases its
weekly update on inventories at 10:30 a.m. on Thursday.

  Producers likely added 85.5 billion cubic feet to storage for the week ended July 3, according to the median average
of 16 forecasters surveyed by the Wall Street Journal on Wednesday. That would be higher than the five-year average of
75 bcf, but lower than last year's 94 bcf.

  The possibility of healthy surpluses and an oversupplied market has helped contribute to a three-session losing
streak for gas prices. Stockpiles are already above their five-year average despite gas becoming the top fuel for power
plants this spring for the first time on record in the U.S. Production has inched back toward its high.

  U.S. weather forecasts are largely temperate, with normal conditions expected over much of the U.S. in the coming
days. Some forecasters said there could be pockets of heat, but several analysts say it probably won't be extreme
enough to ramp up the kind of demand for air conditioning and gas-fired power to soak up the near-record gas
production.

  "There isn't any fear of supply," said Gene McGillian, an analyst at Tradition Energy. "So you don't have any people
worried about being exposed from hot weather."


  Write to Timothy Puko at tim.puko@wsj.com and to Christian Berthelsen at Christian.Berthelsen@wsj.com


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  (END) Dow Jones Newswires

  July 08, 2015 15:04 ET (19:04 GMT)

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

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