Oct. 28 (Bloomberg) -- Natural gas futures dropped for the fifth time in six days on forecasts for mild weather at the start of November and record supplies of the heating fuel.

Above-normal temperatures are probable Nov. 4 to Nov. 10 along the East Coast and in the Midwest, where 72 percent of households rely on gas to meet their heating needs, according to the Climate Prediction Center in Camp Springs, Maryland. Gas inventories probably rose last week, an analyst survey showed.

“We’re still well supplied and temperatures are moderating,” said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “We have to trade what we see, not what we hope to see, and what I see is very bearish.”

Natural gas for November delivery dropped 26.8 cents, or 5.9 percent, to settle at $4.289 per million British thermal units at 3:28 p.m. on the New York Mercantile Exchange. The futures have declined 24 percent this year. The November contract expired today. The more actively traded December futures fell 21.6 cents to $5.066.

Gas stockpiles in the week ended Oct. 16 rose to a record 3.734 trillion cubic feet, according to the Energy Department.

The department may say that storage levels increased by 27 billion cubic feet last week, based on the median of 18 analyst estimates compiled by Bloomberg. The government is scheduled to release its weekly storage update tomorrow.

“The front- and second-month weakness makes perfect sense on the fundamentals,” said Martin King, an analyst at FirstEnergy Capital Corp. in Calgary. “People are also looking out at storage levels six and eight months down the road.”

Crude Oil Drops

Lower prices for other energy commodities also pressured gas futures, King said in a telephone interview.

Crude oil for December delivery fell $2.09, or 2.6 percent, to $77.46 a barrel on the exchange. Heating oil declined 2.8 percent and gasoline slid 4.1 percent.

The department’s Energy Information Administration this week will report a 3 percent increase in proved natural gas reserves between 2007 and 2008, Richard Newell, administrator of the EIA, announced in prepared testimony for a Senate energy committee hearing today.

Proved reserves of dry natural gas were 237.7 trillion cubic feet as of Dec. 31, 2007, according to the administration’s Web site.

The “technical failure” when prices stalled at $5.318 per million Btu on Oct. 21, which triggered four consecutive days of declines, will also weigh on futures in the coming weeks, Rose said.

Technical traders had forecast a price target of about $5.50 per million Btu based on November contract highs reached in May and June.

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

Last Updated: October 28, 2009 16:43 EDT