DJ Natural Gas Falls on Default Bearishness
By Timothy Puko
Natural gas prices are retreating as unchanged weather forecasts and a soon-coming end of summer have traders
reverting to bearish positions.
Natural gas futures for October delivery recently fell 3.9 cents, or 1.4%, to $2.686 a million British thermal units
on the New York Mercantile Exchange. Prices have stayed within a 4.3-cent range for the session, as many expect limited
trading ahead of the extended Labor Day weekend.
The U.S. Energy Information Administration said Thursday that producers added 86 billion cubic feet of natural gas
to storage in the week ended Aug. 28. That is in line with the average forecast of 18 analysts and traders surveyed by
The Wall Street Journal.
While prices rallied Thursday afternoon on technical trading, the data was really just a further sign of unrelenting
oversupply, analysts said. The addition is 40% larger than the five-year average and suggests the market was more than
1 bcf a day oversupplied during the week, according to Tudor, Pickering, Holt & Co., a Houston investment bank. It
brought storage levels to 3.2 trillion cubic feet, 18% more than a year ago and 3.7% above the five-year average.
Summer heat -- and the chance for a major uptick in demand for gas-fired power to run air conditioners -- will be
passing soon, so traders are apt to sell again based on that heavy supply, analysts said.
"We see no items on the horizon capable of forcing a sustainable price advance," Jim Ritterbusch, president of
energy-advisory firm Ritterbusch & Associates, said in a note.
Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.68/mmBtu, compared with
Thursday's range of $2.66-$2.69. Cash prices at the Transco Z6 hub in New York last traded at $2.00/mmBtu, compared
with Thursday's range of $2.18-$2.39.
Write to Timothy Puko at tim.puko@wsj.com
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(END) Dow Jones Newswires
September 04, 2015 09:52 ET (13:52 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
090415 13:52 -- GMT
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