Dow Jones - Natural Gas Prices Retreat From One-Month Price High

DJ Natural Gas Prices Retreat From Near One-Month High


By Timothy Puko

  Natural gas prices retreated after rising to a near one-month high Tuesday as warm weather forecasts aren't severe
enough to keep traders buying.

  Demand for gas rises as summer heat gets people to turn on air conditioners and consume more gas-fired power. Recent
forecasts are predicting above-normal temperatures spreading in the next two weeks across large parts of the country,
especially in the Southeast. But the heat wave isn't severe, and gas production is still at a near-record pace.

  The front-month August contract started to fall by late morning and settled down 2.4 cents, or 0.8%, to $2.84 a
million British thermal units on the New York Mercantile Exchange. It had been as high as $2.934/mmBtu earlier Tuesday,
the highest intraday price since June 17.

  John Woods, president of JJ Woods Associates and a Nymex trader, has said for weeks that he is bullish as prices drop
to about $2.70/mmBtu and bearish as they near $2.90/mmBtu. Gas has traded within a 40-cent range around those prices
since late May. And traders probably sold to take profits as prices approached the top of that range Tuesday morning,
Mr. Woods said.

  "You're not getting plus-$3 until you look across the entire continent (in weather maps) and it's completely red,"
the color that denotes the most extreme heat, Mr. Woods said. Most weather forecasts Tuesday showed yellow and orange,
denoting moderately above-average temperatures. Prices could stay buoyant, however, because a ramp up of summer
consumption would limit the amount of gas going into storage every week.

  A massive surge in production last year set a record for the amount of gas added into storage, and this year those
additions have shrunk as both production has leveled off and power plants have made a greater switch to burn more gas
instead of coal. The hot spell "will continue to cut that surplus to last year. That's a little bullish," said Kyle
Cooper, managing director of research at IAF Advisors, a Houston consulting firm.
   FUTURES             SETTLEMENT   NET CHANGE
   Nymex August        $2.84        -2.4c
   Nymex September     $2.839       -2.8c
   Nymex October       $2.866       -2.9c
   CASH             HUB RANGE           PREVIOUS SESSION
   El Paso Perm     $2.8425 - $2.9175   $2.78 - $2.88
   El Paso SJ       $2.86 - $2.92       $2.80 - $2.83
   Henry Hub        $2.89 - $2.9675     $2.85 - $2.91
   Katy             $2.88 - $2.93       $2.80 - $2.86
   SoCal            $2.98 - $3.075      $2.90 - $2.975
   Tex East M3      $1.27 - $1.34       $1.36 - $1.50
   Transco 65       $2.8725 - $2.965    $2.845 - $2.90
   Transco Z6       $1.80 - $2.10       $2.75 - $2.89
   Waha             $2.87 - $2.90       $2.81 - $2.87

  --Write to Timothy Puko at tim.puko@wsj.com


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  (END) Dow Jones Newswires

  July 14, 2015 15:00 ET (19:00 GMT)

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

071415 19:00 -- GMT
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