June 21 (Bloomberg) -- Natural gas futures fluctuated in New York before a report that may show a smaller-than-average injection into gas stockpiles for the week ended June 15.
Gas advanced as much as 2.4 percent and dropped 0.4 percent as the Energy Department report, scheduled for release at 10:30 a.m., may show that inventories rose 64 billion cubic feet last week, according to the median of 27 analyst estimates compiled by Bloomberg. The five-year average increase for the week is 87 billion, department data show.
“The overriding issue is that storage injections continue to underperform,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “If injections continue to be below average, we could avoid reaching storage capacity later in the year.”
Natural gas for July delivery rose 0.8 cent to $2.525 per million British thermal units at 9:27 a.m. on the New York Mercantile Exchange. The futures have declined 16 percent this year and are up 32 percent after tumbling to a 10-year intraday low of $1.902 per million Btu on April 19.
The weather will be hotter than normal in the Northeast through June 25, according to MDA EarthSat Weather in Gaithersburg, Maryland. Cooling demand in the U.S. may be 7 percent above normal on June 23, data from Weather Derivatives in Belton, Missouri, show.
The high in New York on June 23 may be 85 degrees Fahrenheit (29 Celsius), 4 above normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Philadelphia may be 86 degrees, 1 higher than the usual reading.
Electricity producers account for about 36 percent of U.S. gas consumption, according to the Energy Department.
An area of low pressure extending from the northwest Caribbean Sea to Florida has a 30 percent chance of becoming a tropical cyclone within the next 48 hours, the National Hurricane Center said in an outlook at 8 a.m. today in Miami.
The Gulf accounts for about 6.5 percent of U.S. marketed gas production, according to the Energy Department.
The U.S. cut its forecast for natural gas output in 2012 by 1 percent, according to the Energy Department’s June 12 Short-Term Energy Outlook. Marketed gas production will average 68.47 billion cubic feet a day this year, down from 69.14 billion estimated in May, the department said.
Gas prices at the benchmark Henry Hub in Erath, Louisiana, will average $2.55 per million British thermal units, up from the previous estimate of $2.45, according to the report.
The number of rigs drilling for natural gas in the U.S. fell by three to 562 last week, the lowest count since September 1999, according to data released June 15 by Baker Hughes Inc. in Houston.
Encana Corp., Canada’s largest natural-gas producer, expects prices for the fossil fuel to rise to about $4 per Btu by the end of the year as storage surpluses decline and production slows, said Renee Zemljak, executive vice president for the Calgary-based company’s midstream, marketing and fundamentals unit, in a webcast today.
----With assistance from Jeremy van Loon in Calgary. Editors: Bill Banker, Charlotte Porter
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