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DJ Volatile Reaction To Bullish EIA Gas Storage Data
By Spencer Jakab
Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--Natural gas futures traders on the New York Mercantile
Exchange sent gas futures on wild ride Thursday in the aftermath of a
closely-watched report on gas storage by the Energy Information Administration.

November natural gas futures soared 30 cents and then plunged 50 cents per
million British thermal units within several minutes of the report, which was
ostensibly bullish relative to expectations.

"This market's just a roller coaster," said Tom Saal, a gas futures trader at
Commercial Brokerage Corp. "I think the market's just very thin and a lot of
people got surprised by yesterday's move."

The reported build of 53 billion cubic feet was 10 bcf less than the
consensus in a Dow Jones Newswires survey and six bcf below the implied result
in a closely-watched auction of options by ICAP Energy and Nymex on the
report's outcome. It follows two consecutive reports that saw surprisingly
large builds relative to market expectations given production losses from Gulf
of Mexico hurricanes.

The week contained in the report had production losses of about 32 bcf and
the current week should have losses of 50-55 bcf since it mostly encompasses a
period after Hurricane Rita's landfall. The combined losses from the two storms
of 180 bcf have already surpassed in five weeks what Hurricane Ivan curtailed
in five months spanning 2004 and 2005.

In order to reach the benchmark of 3.2 trillion cubic feet of storage for the
start of the heating season on Nov. 1, average storage builds for the next five
weeks must be at least 63 bcf. This compares to a five-year average for this
period of below 60 bcf. In light of ongoing outages in the Gulf of Mexico, this
may be challenging or at least may force up spot gas prices as storage buyers
are forced to outbid more economically sensitive customers.



-By Spencer Jakab, Dow Jones Newswires; 201-938-4377;
[e-mail]