Dow Jones - Natural Gas Adds To Gains On Stockpile Addition

DJ Natural Gas Adds to Gains on Stockpile Addition


   By Timothy Puko


  Natural gas prices crested near a two-week high after a weekly stockpile addition came in lower than expected.

  The front-month October contract settled up 3.2 cents, or 1.2%, at $2.683 a million British thermal units on the New
York Mercantile Exchange on Thursday. Prices rose as high as $2.733/mmBtu in the minutes after the federal government's
weekly update on storage levels, just fractions of a penny short of the two-week intraday high.

  They pared back those gains after hitting the top of the narrow 11-cent range they have been stuck in since Aug. 24.
Missing estimates on the storage report have helped keep gas prices in that tight range as alternating overestimates
and underestimates keep pushing prices back and forth, said Kyle Cooper, managing director of research at IAF Advisors,
a Houston consulting firm. "It's really containing the market," he said. Prices are "right back into the range."

  The U.S. Energy Information Administration said Thursday morning that producers added 68 billion cubic feet of
natural gas to storage in the week ended Sept. 4. That is 7 bcf lower than the average forecast of 19 analysts and
traders surveyed by The Wall Street Journal.

  The EIA update is widely considered one of the best measures of supply and demand for the natural gas market. While
it suggests the market was oversupplied compared to historical norms, it is less oversupplied than some had expected
heading into this update. That is often bullish for prices.

  "The market right now is just looking for something to buy on," said Kent Bayazitoglu, analyst at energy-consulting
firm Gelber & Associates in Houston. "There are definitely people out there who want to buy at these low prices."

  The 68-bcf addition brings storage levels to 3.3 trillion cubic feet, 17% more than a year ago and 4.1% above the
five-year average. Expectations of that surplus has helped push gas down to three-month lows in recent weeks.
   FUTURES               SETTLEMENT     NET CHANGE
   Nymex October           $2.683        3.2c
   Nymex November          $2.759        2.3c
   Nymex December          $2.914        1.8c
   CASH HUB               RANGE            PREVIOUS SESSION
   El Paso Perm      $2.5925-$2.61           $2.615-$2.69
   El Paso SJ        $2.59-  $2.61           $2.61- $2.6975
   Henry H           $2.69-  $2.77           $2.70- $2.75
   Katy              $2.63-  $2.70           $2.65- $2.71
   SoCal             $2.8075-$2.83           $2.82- $2.88
   Tex East M3       $1.305- $1.38           $1.48- $1.56
   Transco 65        $2.64-  $2.67           $2.64- $2.715
   Transco Z6        $2.38-  $2.42           $2.45- $2.775
   Waha              $2.585- $2.615          $2.64- $2.70

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


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  (END) Dow Jones Newswires

  September 10, 2015 15:01 ET (19:01 GMT)

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

091015 19:01 -- GMT
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