By Reg Curren Jan. 25 (Bloomberg) -- Natural gas futures fell in New York on forecasts for mild weather in the Midwest early next month, which may reduce demand for the heating fuel. Above-normal temperatures are predicted for Illinois, Michigan, Wisconsin and Ohio between Feb. 4 and Feb. 8, according to Commodity Weather Group of Bethesda, Maryland. Temperatures will dip late this week, but the cold will be short-lived, the forecaster said. “The market is a little softer on the weather forecasts this morning,” Teri Viswanath, director of commodities research with Credit Suisse Securities USA in Houston, said in an interview. “Between yesterday and today the weather models have warmed up. The 11-to-15-day is slightly warmer.” Natural gas for February delivery declined 8.3 cents, or 1.4 percent, to $5.736 per million British thermal units at 10:11 a.m. on the New York Mercantile Exchange. The contract expires on Jan. 27. About 72 percent of households in the Midwest rely on natural gas for heat. Cold weather in December and early January helped send gas stockpiles into a deficit to the five-year average for the first time since August 2008, according to Energy Department data. Inventories fell 245 billion cubic feet in the week ended Jan. 15, leaving stockpiles 0.2 percent below the average. “If we had these numbers in September, I’d be worried,” said Michael Rose, director of trading at brokerage Angus Jackson Inc. in Fort Lauderdale, Florida. “As bad as people view this, these numbers aren’t out of line and it doesn’t mean we’re short gas.” Heating Fuel Stockpiles typically decline between November and early April, when demand for the heating and factory fuel exceeds production and imports. The number of gas rigs exploring for gas in the U.S. rose by 22, or 2.7 percent, to 833 last week, according to data compiled by Baker Hughes Inc. The total has risen 25 percent from a seven-year low of 665 reached in July. Traders are also “playing in a range” with natural gas, preferring to sell the contract as it rises near $6, Rose said. Buyers jump in around $5.40, he said. Futures settled at a one-year high of $6.009 per million Btu on Jan. 6 and since then haven’t closed higher than $5.819. To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net

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