Dow Jones - End of Day Natural Gas Commentary

DJ Natural Gas Holds Steady on Warmer Forecasts


   By Timothy Puko


  Natural gas prices inched up Wednesday as weather forecasts continue to warm, pushing stronger expectations for
demand and helping to prop up the market.

  The front-month September contract settled up 0.8 cent, or 0.3%, at $2.693 a million British thermal units on the New
York Mercantile Exchange. Prices closed near the bottom of a 28-cent range they have settled in every session for more
than two months.

  September options expired at close and futures expire Thursday. The more actively traded October contract gained 0.8
cent, or 0.3%, to $2.703/mmBtu.

  Consumption of gas-powered electricity often rises in the summer as people turn on their air-conditioning units. New
forecasts from Commodity Weather Group LLC now agree with Tuesday's updates from rival private forecaster MDA Weather
Services in Maryland showing temperatures around 8-degrees-Fahernheit above normal at the start of next week throughout
Midwest and Northeast.

  The demand for gas-fired power should help absorb enough supply that it keeps storage from filling up this autumn,
said Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York. Many analysts and traders earlier in the
summer warned of a strong fall in prices if tepid demand allowed near-record supply to take up all the storage space
available for extra gas ahead of the peak-demand winter-heating season.

  This "should prevent an exaggerated selloff," Ms. Viswanath said in a note.

  The U.S. Energy Information Administration has its next update on storage levels scheduled for Thursday at 10:30 a.m.
EDT. It is likely to show an increase of 61 billion cubic feet of gas for the week ended Aug. 21, according to the
average forecast of 24 analysts and traders surveyed by The Wall Street Journal.
   FUTURES       SETTLEMENT   NET CHANGE
   Nymex September   $2.693    0.8c
   Nymex October     $2.703    0.8c
   Nymex November    $2.784    1.1c

   CASH HUB          RANGE      REVIOUS SESSION
   El Paso Perm   $2.57-$2.635   $2.58-$2.64
   El Paso SJ     $2.615-$2.645  $2.615-$2.6375
   Henry Hub      $2.695-$2.75   $2.6775-$2.72
   Katy           $2.65-$2.68    $2.64-$2.68
   SoCal          $2.79-$2.835   $2.78-$2.83
   Tex East M3    $1.27-$1.30    $1.29-$1.32
   Transco 65     $2.69-$2.715   $2.67-$2.715
   Transco Z6     $2.65-$2.75    $2.5475-$2.55
   Waha           $2.63-$2.67    $2.65-$2.68


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


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  (END) Dow Jones Newswires

  August 26, 2015 15:24 ET (19:24 GMT)

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

082615 19:24 -- GMT
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