Dow Jones - Natural Gas Sinks To A 3-Year Low

DJ Natural Gas Sinks to Three-Year Low

By Nicole Friedman

     NEW YORK--Natural gas futures fell to fresh three-year lows Thursday as expectations of continued weak demand
outweighed a smaller-than-expected inventory build.

     Futures for November delivery settled down 1.8 cents, or 0.7%, at $2.386 a million British thermal units on the
New York Mercantile Exchange, the lowest settlement since June 13, 2012.

     Natural gas inventories typically rise at this time of year as producers stock up the heating fuel ahead of the
winter, when consumption rises. The so-called injection season typically ends at the end of October, and consumers then
draw natural gas out of storage to use for indoor heating through the end of March.

     This year, forecasts for warmer-than-normal weather in the coming weeks have traders concerned that stockpiles
will continue to build longer than normal this year, pushing the already-oversupplied market into a deeper glut.

     The U.S. Energy Information Administration said Thursday that natural-gas inventories grew by 81 billion cubic
feet last week, less than the 87-bcf build that analysts surveyed by The Wall Street Journal had expected. Even so, the
market remains oversupplied, as stockpiles remain 4.5% above the five-year average for this time of year.

     "What does a bullish weekly inventory number really mean to the market? It appears, very little," said Teri
Viswanath, director of commodity strategy for natural gas at BNP Paribas SA. "You're not seeing a significant rise in
heating demand on the horizon, and that is going to limit any short-term gains."

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


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  (END) Dow Jones Newswires

  October 22, 2015 15:17 ET (19:17 GMT)

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102215 19:17 -- GMT
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