Dow Jones Natural Gas - End of Day Commentary

DJ Natural Gas Prices Decline on Expected Demand Drop



  By Nicole Friedman


  NEW YORK--Natural gas prices slid Monday, notching a second straight monthly loss, as traders looked past the current
hot weather to an expected drop in demand in the fall.

  Futures for October delivery settled down 2.6 cents, or 1%, at $2.689 a million British thermal units on the New York
Mercantile Exchange. Prices fell 1% this month.

  Hot weather typically boosts natural-gas demand, as households and offices use gas-powered electricity to run
air-conditioning units. Weather-driven demand has helped keep the natural-gas market relatively balanced.

  Higher-than-average temperatures are forecast in the eastern U.S. in the next six to 10 days, but more moderate
weather is expected in the next 11 to 15 days, according to forecaster WSI Corp.

  "While periods of warmer-than-normal weather are still possible, after this week, weather conditions will generally
be too moderate to create high levels of air-conditioning demand," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note.

  Prices have traded in a tight range all summer, as strong demand has kept prices supported despite robust production.
However, with temperatures expected to cool as summer ends, "the price stalemate may come under pressure, with more
downside risk in the near-term," said consulting firm RBN Energy in a blog post Sunday. "It will probably take an
unusual weather event to boost natural gas prices during the fall season," such as a hurricane or an unexpected heat
wave.

  Bank of America Merrill Lynch lowered its natural-gas price forecast last week to $3.50/mmBtu in 2016, from its prior
forecast of $3.90/mmBtu.

  Raymond James cut its natural-gas price forecasts Monday to $3.25 a thousand cubic feet from 2016 to 2020, down from
its prior forecasts of $3.55/mcf in 2016 and $3.75/mcf from 2017 to 2020.


  FUTURES SETTLEMENT NET CHANGE


  Nymex October  $2.689 -2.6c

  Nymex November $2.761 -3.1c

  Nymex December $2.905 -3.4c


   CASH HUB RANGE PREVIOUS SESSION


  El Paso Perm $2.56-$2.60 $2.47-$2.54

  El Paso SJ $2.54-$2.585 $2.46-$2.56

  Henry Hub $2.66-$2.70 $2.645-$2.67

  Katy $2.60-$2.65 $2.59-$2.66

  SoCal $2.65-$2.72 $2.67-$2.77

  Tex East M3 $1.19-$1.33 $0.985-$1.14

  Transco 65 $2.64-$2.68 $2.62-$2.675

  Transco Z6 $2.76-$2.87 $1.80-$2.10

  Waha $2.60-$2.62 $2.56-$2.60


  Write to Nicole Friedman at nicole.friedman@wsj.com


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  (END) Dow Jones Newswires

  August 31, 2015 15:21 ET (19:21 GMT)

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

083115 19:21 -- GMT
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