Northeast Natural Gas Falls to 11-Week Low as Shipments Drop

Natural gas for next-day delivery at the Transco-Z6 hub in the U.S. Northeast fell to the lowest price in more than 11 weeks as warmer-than-normal reduced demand for the heating fuel.

Gas prices at the hub, which delivers the fuel to the New York City region, dropped 3.1 percent. Scheduled gas deliveries to New York residents tumbled 18 percent, the biggest decline since Sept. 9, according to Bloomberg data.

“You’ve got warm weather coming in the next couple of days so heating demand won’t be as strong as in the first half of the month,” said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas.

Wholesale gas for next-day delivery at the hub declined 14.8 cents to $4.6386 per million British thermal units on the Intercontinental Exchange, the lowest level since Nov. 29. Gas at the Tetco-M3 hub, which also transports gas to the New York area, slid 1.3 percent to $4.2095.

About 3 million dekatherms of gas (2.92 billion cubic feet) were to be delivered to residences in New York as of 2:05 p.m., down from yesterday’s 3.67 million, Bloomberg data showed.

Scheduled shipments for residential use in the U.S. declined 14 percent to 33.9 million dekatherms, the lowest level since Nov. 22.

Temperature Forecasts

Temperatures will be as much as 14 degrees Fahrenheit above normal in the U.S. East, Midwest and South through Feb. 20, according to Commodity Weather Group LLC in Bethesda,Maryland.

The high temperature in New York will be 55 degrees Fahrenheit (13 Celsius) tomorrow, 14 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high will be 63 degrees on Feb. 18.

Heating demand will be 22 percent below normal levels in the Northeast through Feb. 23, according to Weather Derivatives in Belton, Missouri.

Gas for next-day delivery at the Henry Hub in Erath, Louisiana, gained 1.19 cents, or 0.3 percent, to $3.9335. The hub is the benchmark for gas futures traded on the New York Mercantile Exchange.

(Source: http://www.bloomberg.com/news/2011-02-16/northeast-natural-gas-falls-to-11-week-low-as-shipments-drop.html)