July 27 (Bloomberg) -- Natural gas at Canada's largest trading point may drop after U.S. storage levels expanded to a near record and moderate weather is forecast for the weekend in several key markets.

Injections of gas into underground storage facilities in the U.S. last week totaled 71 billion cubic feet. That exceeded the median estimate of 70 billion, based on 21 responses in a Bloomberg survey of analysts, and boosted injection levels 16 percent higher than the five-year.

Stockpiles stand at 2.763 trillion cubic feet, ahead of the same point last year when they eventually reached a record 3.458 trillion in October.

Injections may continue to expand more rapidly than a year ago, when hot weather limited additions, and reduce prices, Credit Suisse analyst Jonathan Wolff said yesterday in a research note.

``We expect short-term prices to continue to weaken as storage becomes stressed,'' he said. Owners of storage facilities may limit injections once total inventories exceed 3 trillion cubic feet, likely within the next five weeks, Wolff said.

Temperatures in New York are forecast to fall as much as 5.9 percent below typical to 80 degrees Fahrenheit (27 degrees Celsius) on Sunday, according to an outlook from AccuWeather.com. In Toronto, Canada's largest city, highs on the weekend are forecast to hover around the seasonal average of 81 degrees, government agency Environment Canada said.

The U.S. Northeast is one of the biggest markets for Canadian gas, which supplied 86 percent of U.S. gas imports in 2006, according to Energy Department data.

On Calgary-based Natural Gas Exchange Inc.'s NGX electronic energy market, spot prices at AECO yesterday rose 15 cents, or 3.3 percent, to C$4.74 per gigajoule ($4.737 per million British thermal units). It was the biggest one-day gain at the southern Alberta trading point since July 19, according to data compiled by Bloomberg.

To contact the reporter on this story: Ian McKinnon in Calgary at imckinnon1@bloomberg.net.

Last Updated: July 27, 2007 07:30 EDT