Natural gas futures fell for a fifth day in New York on forecasts of moderating temperatures that may reduce demand for the heating fuel.
Gas dropped as much as 1 percent as MDA Federal Inc.’s EarthSat Energy Weather in Rockville, Maryland, predicted temperatures may be normal or above normal in the Northeast, South and West from Jan. 16 through Jan. 20. Stockpiles of the fuel as of Dec. 31 were 6.5 percent above the five-year average, according to the Energy Department.
“When I look at the next 15 days, I see pockets where days are cold, but then temperatures moderate very quickly,” said Mike Rose, director of energy trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “Yes, we’ve taken some gas out of storage, but not enough to really make a difference.”
Natural gas for February delivery fell 5.3 cents, or 1.2 percent, to $4.346 per million British thermal units at 9:36 a.m. on the New York Mercantile Exchange. The futures have declined 20 percent from a year ago.
“The forecast has shifted in the warmer direction across parts of the West, South, and East, while the Central U.S. remains quite cold,” MDA forecasters led by Travis Hartman said in a note to clients today.
Normal temperatures are likely in northern New England and most of the western half of the U.S. from Jan. 21 through Jan. 25, MDA said.
The low temperature in New York on Jan. 18 may be 32 degrees Fahrenheit (0 Celsius), 6 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The low in Boston may be 33 degrees, 11 above normal.
Heating demand in the U.S. may be 10 percent below normal levels from Jan. 17 through Jan. 21, according to Weather Derivatives in Belton, Missouri.
About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.
U.S. gas drilling rigs fell for a fifth week in the week ended Jan. 7, dropping by 5 to 914, according to Houston-based Baker Hughes Inc. That’s the lowest level since Feb. 26, 2010.