BLBG: Natural Gas Drops to Six-Week Low on Forecast of Milder Weather
Natural gas futures declined to the lowest level in almost six weeks as forecasts showed milder weather next week, reducing demand for the heating fuel.
Gas dropped for a third day as the National Weather Service predicted temperatures will be higher than usual in the U.S. East and Midwest from Feb. 12 to Feb. 16. The weather has been colder than normal this month. U.S. gas stockpiles are 0.2 percent above the five-year average, according to an Energy Department report last week.
“It’s gradually getting warmer and you are having declining winter-heating needs,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “The storage draws are big and strong but they just haven’t been overwhelming enough to really draw down storage to below average levels.”
Natural gas for March delivery fell 13.5 cents, or 3.1 percent, to $4.175 per million British thermal units at 10:13 a.m. on the New York Mercantile Exchange, after declining to $4.154, the lowest intraday price since Dec. 28. The futures have dropped 24 percent from a year ago.
There will be widespread above-normal weather for the “central to eastern thirds of the nation” next week, according to Commodity Weather Group LLC in Bethesda, Maryland.
New York will have a high of 52 degrees Fahrenheit (11 Celsius) on Feb. 15, 11 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. Boston will have a high of 47 degrees, 8 degrees above normal.
About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.
U.S. gas inventories fell 189 billion cubic feet in the week ended Jan. 28 to 2.353 trillion, the Energy Department said on Feb. 3. The surplus to the five-year average narrowed from 1.2 percent the previous week.
The number of U.S. gas drilling rigs declined by two last week to 911, according to Baker Hughes Inc. The rig count was 3.8 percent higher than a year earlier.
To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net;
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
