Natural Gas Declines on Outlook for Below-Average Supply Drop
Natural gas futures fell in New York for the first time in three days on speculation that a government report today will show a below-average inventory decline for last week because of mild weather.
Gas slid as much as 1.5 percent before the Energy Information Administration may say that U.S. stockpiles fell by 124 billion cubic feet last week, based on the median of 25 analyst estimates compiled by Bloomberg. The five-year average drop for the week is 140 billion. The Standard & Poor’s GSCI commodity index tumbled 1.3 percent today, heading for the biggest drop since November, as energy contracts declined.
“It’s already a small number and if you get anything south of that, it would be a very negative development in the market,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “There is a sense of caution in the commodity space. Everything is getting leaned on pretty good.”
Natural gas for March delivery slid 2.9 cents, or 0.9 percent, to $3.25 per million Btu at 9:26 a.m. on the New York Mercantile Exchange. Trading volume was 3.8 percent below the 100-day average for the time of day. Gas is down 3 percent this year.
The EIA is scheduled to release its weekly gas storage report at 10:30 a.m. in Washington.
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