Dow Jones - Natural Gas Falls As Traders Watch For Oversupply

DJ Natural Gas Falls as Traders Watch For Oversupply



  By Nicole Friedman


  NEW YORK--Natural gas prices fell Thursday on expectations that the market would continue to be oversupplied.

  Prices rose earlier in the week on expectations that hot weather in the southern U.S. would boost demand for
gas-powered electricity, as people turned on air-conditioning units. But weather forecasts released Wednesday and
Thursday called for cooler temperatures, which could lower natural-gas consumption.

  "Hot summer weather will start to taper off soon...reducing power-sector demand and pushing prices lower," said
Andrew Weissman, chief executive of EBW Analytics Group, in a note. "The speed and severity with which prices decline
will depend heavily on weather during mid-August."

  Futures for September delivery recently fell 6.1 cents, or 2.2%, to $2.737 a million British thermal units on the New
York Mercantile Exchange.

  Traders are waiting on weekly inventory data from the U.S. Energy Information Administration, which is due at 10:30
a.m. ET.

  Analyst surveyed by The Wall Street Journal expect the agency to report that natural gas supplies rose by 43 billion
cubic feet in the week ended July 31, less than the five-year average build for this time of year.

  A smaller-than-average build could keep the market oversupplied compared to historical norms. If the storage estimate
is correct, inventories as of July 31 will total 2.923 trillion cubic feet, 23% above the year-ago level and 2.6% above
the five-year average for the same week.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.77/mmBtu, compared with
Wednesday's range of $2.845-$2.865. Cash prices at the Transco Z6 hub in New York traded at $1.45/mmBtu, compared with
Wednesday's range of $1.65-$1.80.


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


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  (END) Dow Jones Newswires

  August 06, 2015 09:53 ET (13:53 GMT)

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

080615 13:53 -- GMT
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