March 26 (Bloomberg) -- Natural gas advanced a fourth day as speculators bought commodities after the dollar weakened against the euro and crude oil surged.

The dollar extended its decline against the euro as orders for U.S. durable goods unexpectedly fell in February. The 1.7 percent drop followed a 4.7 percent decrease in the prior month, the Commerce Department said today in Washington. Oil rose as an inflation and currency hedge.

``Capital inflows into commodities to hedge inflation and the declining dollar create this upward pressure'' on natural gas, said Michael Haigh, senior commodity strategist for Societe Generale in New York.

Gas for April delivery rose 15.3 cents, or 1.6 percent, to settle at $9.572 per million British thermal units at 2:54 p.m. on the New York Mercantile Exchange. Gas touched a two-year high of $10.294 per million Btu on March 14 and has gained 5.6 percent this week and 28 percent so far this year.

Gas has ``a shot at going past $10 again,'' said Tom Orr, director of research at Weeden & Co. in Greenwich, Connecticut. ``The dollar is weak, crude is going back up and people are in the follow-along trade.''

Crude oil for May delivery rose $4.68, or 4.6 percent, to settle at $105.90 a barrel in New York. Futures prices climbed to $111.80 a barrel on March 17, the highest since trading began in 1983. Oil is up 68 percent from a year ago.

``Given that natural gas is significantly cheaper than crude oil, when compared on a Btu basis, the potential for rising demand and tighter supplies should maintain a bullish tilt to the market,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York.

Inventories

Inventories probably fell 45 billion cubic feet last week, according to the median of 13 analyst estimates compiled by Bloomberg News. The five-year average change for same week of the year is a decline of 40 billion.

Analysts speculate U.S. inventories may decline to about 1.25 trillion cubic feet by March 31, the end of the winter heating season. Supplies were 1.569 trillion at the end of March 2007 and 1.695 trillion in 2006, according to the Energy Department.

The department is scheduled to release its weekly report on storage tomorrow at 10:30 a.m. in Washington.

Imports of liquefied natural gas this year may fall below the 2.1 billion cubic feet a day in 2007. Analysts credit LNG, gas that has been cooled to a liquid state so that it can moved by tankers to markets not connected by pipelines, with helping boost U.S. inventories to a record 3.545 trillion cubic feet at the start of the winter demand season last November.

LNG Imports

LNG imports are averaging 800 million cubic feet a day, about one-third the daily average of a year ago, Stacy Nieuwoudt, an analyst at Tudor, Pickering, Holt & Co. in Houston, said in a note today.

The Dollar Index traded on ICE Futures in New York, which compares the currency to those of six trading partners, traded at 71.514 today, compared with 72.276 yesterday. It reached a record low of 70.698 on March 17, when the dollar fell to the lowest level against the euro since the European currency's debut in 1999.

Gold rose for a second straight day in New York as the dollar dropped against the euro. Silver also gained.

Gold futures for April delivery rose $14.20, or 1.5 percent, to $949.20 an ounce on the Comex division of the New York Mercantile Exchange. Before today, the metal gained 12 percent this year.

Silver futures for May delivery climbed 58.3 cents, or 3.3 percent, to $18.383 an ounce. Before today, the price gained 19 percent this year.

Natural gas is the most widely used U.S. heating fuel and the third-largest source of electricity, after coal and nuclear plants, according to the Energy Department.

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

Last Updated: March 26, 2008 15:06 EDT