Dow Jones - Natural Gas Gains On Expectations of Storage Withdrawal

DJ Natural Gas Gains on Expectations of Storage Withdrawal



  By Nicole Friedman


  NEW YORK--Natural gas prices ticked higher Monday on expectations that record-high stockpiles have peaked.

  Natural-gas inventories typically grow between April and October, as producers prepare for the winter-heating season,
then shrink starting in November as demand for the heating fuel increases.

  This year, moderate temperatures kept natural-gas consumption subdued in early November, and stockpiles continued to
build through Nov. 20, according to the Energy Information Administration. Inventories are at a record high above 4
trillion cubic feet.

  Some analysts expect the EIA will report Thursday that stockpiles shrank for the first time this season in the week
ended Nov. 27, easing concerns that natural-gas storage facilities could run out of room to store the fuel.

  "The downside potential for natural gas is becoming limited," said Andy Weissman, chief executive of EBW
AnalyticsGroup, in a note. "Natural gas withdrawals from storage are...likely to be higher than many traders expect,
slowly eroding the huge current storage surplus."

  Futures for January delivery recently rose 1.4 cents, or 0.6%, to $2.226 a million British thermal units on the New
York Mercantile Exchange.

  However, mild temperatures could keep prices low. Forecasts on Monday showed warmer-than-average weather in the next
two weeks.

  "With supply remaining robust and the lack of winter-like weather, nat gas prices are likely to remain weak going
forward," said Dominick Chirichella, analyst at the Energy Management Institute, in a note.

  Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.10/mmBtu, compared with last
Wednesday's range of $2.00-$2.10. Cash prices at the Transco Z6 hub in New York last traded at $2.09mmBtu, compared
with Wednesday's range of $1.71-$1.85.


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


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  (END) Dow Jones Newswires

  November 30, 2015 10:46 ET (15:46 GMT)

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

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