Dow Jones - Natural Gas Gets Boost As Oversupply Fears Weaken

DJ Natural Gas Gets Boost as Oversupply Fears Weaken


   By Timothy Puko


  Natural-gas prices rebounded slightly Friday as warm temperatures and smaller weekly surpluses have calmed fears that
the country's stockpiles will near capacity going into the winter.

  Natural-gas futures for September delivery recently rose 1.6 cents, or 0.6%, to $2.803 a million British thermal
units on the New York Mercantile Exchange. Trading has been limited to a 4.5-cent range for the day and prices are
holding to the middle of a 31-cent range they have been stuck in for more than two months.

  Trading is largely limited to book-squaring moves on Fridays as traders work primarily to limit exposure going into
the weekend, analysts said.

  Support has come as weekly surpluses have fallen sharply from earlier in the summer. Prices slid yesterday after data
showed a 65-billion-cubic feet addition to stockpiles last week, about 18% more than expected. But, in the bigger
picture, the addition is far below the 79 bcf added during this week last year and the additions of more than 90 bcf
that started July.

  These weekly surpluses have declined as power plants consume a record amount of gas this year. Hot weather has kept
demand high for gas-fired power to fuel air conditioners, and Friday's forecasts show that trend continuing in the
coming days, analysts said.

  It is calming fears that large surpluses could have nearly filled storage before the beginning of winter heating
season. That possibility had several analysts forecasting steep price declines for the end of summer and the fall, but
they have pulled back in recent days.

  On Friday, Simmons & Co. International became the latest bank to say there will be less gas in storage going into the
winter than previously expected. It cut its forecast to 3.9 trillion cubic feet, down from 4 tcf.

  "With more room in storage and the possibility of heavier (autumn) demand ahead, we expect that the industry will
avert a collapse in price this season," Teri Viswanath, a natural-gas strategist at BNP Paribas SA in New York, said in
a note. "While we anticipate more price deterioration ahead, it looks increasingly doubtful that natural gas futures
will establish a new low ... ."

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.8375/mmBtu, compared with
Thursday's range of $2.84-$2.93. Cash prices at the Transco Z6 hub in New York last traded at $2.93/mmBtu, compared
with Thursday's range of $2.70-$2.7975.


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


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  (END) Dow Jones Newswires

  August 14, 2015 11:19 ET (15:19 GMT)

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

081415 15:19 -- GMT
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