Natural Gas Drops for Second Day in N.Y. on Forecasts of Milder Weather

Natural gas futures fell for a second day in New York as forecasts showed milder weather in the South, reducing demand for gas-fired electricity to run air conditioners.

Gas dropped as much as 1.1 percent as forecasters including MDA EarthSat Weather in Gaithersburg, Maryland, said temperatures will be in a normal or below-normal range in the southern states next week. The weather in the region has been above normal since last week.

“The weather is kind of moderating,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “We are in an area of the market where we’ll have a lot of selling and the market’s going to have a tough time extending too far up.”

Natural gas for May delivery fell 1.1 cents, or 0.3 percent, to $4.378 per million British thermal units at 9:58 a.m. on the New York Mercantile Exchange. The futures have declined 0.6 percent this year. The May contract expires tomorrow. The June contract dropped 0.9 cent to $4.443 per million Btu.

After this week, warmer air will probably be absent across most of the U.S. through May 10, according to Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland.

“A variable spring pattern is preventing heat from locking in anywhere over the next two weeks,” Rogers said in a note to clients today. “Instead, most areas see occasional quick hits of heat.”

Dallas will have a high of 77 degrees Fahrenheit (25 Celsius) on May 3, 4 degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania. The city had a high of 87 degrees on April 24, 9 degrees above normal.

Temperatures in the Midwest will be below normal next week, with Chicago approaching a “freezing” level, according to EarthSat. Cold weather may lift demand for gas in the region for heating.

Power plants use 30 percent of the nation’s gas supplies, according to the Energy Department. Residential consumers account for about 20 percent.

(Source: http://www.bloomberg.com/news/2011-04-26/natural-gas-drops-for-second-day-in-n-y-on-forecasts-of-milder-weather.html)