Natural Gas Falls a Third Day in New York on Forecasts for Milder Weather

Natural gas futures declined for a third day, heading for the longest losing streak in a month, as warmer-than-normal weather reduces demand for the heating fuel.

Gas fell as much as 1 percent as forecasters including MDA EarthSat Weather in Gaithersburg,Maryland, said the mid- Atlantic region has a good chance of temperatures soaring far above normal next week. U.S. heating demand will be 19 percent lower than average from tomorrow through April 12, according to Weather Derivatives in Belton, Missouri.

“The market realized that winter is over and we are getting into a low-demand shoulder season,” said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas.

Natural gas for May delivery fell 1 cent, or 0.2 percent, to $4.279 per million British thermal units at 11:37 a.m. on the New York Mercantile Exchange after dropping as low as $4.245. Gas last had a three-day losing streak at the start of March. The futures have declined 2.9 percent this year.

“We are kind of stuck in a very congested range between $4.25 and $4.35,” said Stephen Schork, president of Schork Group Inc., a consulting company in Villanova, Pennsylvania.

The Atlantic coast from Massachusetts to Florida may be warmer than normal from April 15 to April 19, according to Commodity Weather Group LLC in Bethesda, Maryland.

Cool air may return to the northern U.S. from the Pacific Northwest to the Great Lakes during the same period, according to Matt Rogers, president of Commodity Weather.

Mild Weather

The high temperature in New York will be 66 degrees Fahrenheit (19 Celsius) on April 11, 7 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. Washington will have a high of 74 degrees.

About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.

“Weather patterns have shifted considerably, with a mostly warmer-than-normal outlook replacing colder-than-normal temperatures realized over the end of March,” James R. Crandell, an analyst with Barclays Capital in New York, said in a note to clients today.

The department may say on April 7 that gas stockpiles slipped 52 billion cubic feet in the week ended April 1, according to the median of five analyst estimates compiled by Bloomberg. The five-year average for the week is an increase of 13 billion.

U.S. gas inventories rose 12 billion cubic feet in the week ended March 25 to 1.624 trillion cubic feet, the Energy Department reported last week.

The stockpile gain compared with a five-year average withdrawal for the week of 22 billion cubic feet, department data show. A surplus to the five-year average rose to 4.4 percent from 2.2 percent the previous week.

U.S. gas drilling rigs rose 11 to 891 last week, the secondly weekly gain, according to Houston-based Baker Hughes Inc. Rising rigs indicate higher production in the future.

(Source: http://www.bloomberg.com/news/2011-04-05/natural-gas-falls-a-third-day-in-new-york-on-forecasts-for-milder-weather.html)