Natural gas dropped for the fourth time in five days on forecasts for warmer weather that would reduce demand for the heating fuel on the heels of a snowstorm.
Gas futures in New York have slumped 32 percent from a five-year high of $6.493 on Feb. 24. Boston temperatures may climb to 53 degrees Fahrenheit (12 Celsius) on March 28 after falling to an expected 22 degrees later today, as snow blankets the New England coast, according to AccuWeather Inc. Commodity Weather Group LLC predicted mostly normal readings on the East Coast from March 31 through April 4.
“We’re going to start seeing more seasonable temperatures within the next couple of days that will limit gas demand,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “After today, the overnight lows in the Northeast will mostly be above freezing.”
Natural gas for April delivery fell 0.9 cent to settle at $4.402 per million British thermal units on the New York Mercantile Exchange. Volume for all futures traded was 45 percent below the 100-day average at 2:43 p.m. The futures dropped to a 10-week intraday low of $4.262 per million Btu on March 24. April gas options expired today.
Philadelphia temperatures may advance to 60 degrees on March 28, 3 higher than usual, AccuWeather said on its website. About 49 percent of U.S. households use gas for heating, according to the Energy Information Administration, the Energy Department’s statistical arm.
The storm will move into the Canadian Maritimes by tomorrow morning after leaving heavy snow over parts of the New England coast, the National Weather Service said.
An EIA report scheduled for release tomorrow may show that inventories fell 52 billion cubic feet in the week ended March 21, according to the median of 17 analyst estimates compiled by Bloomberg. The five-year average decline for the period is 7 billion. Supplies slid by 90 billion in the same week last year.
Gas stockpiles totaled 953 billion cubic feet in the week ended March 14, dropping below 1 trillion for the first time since 2003, EIA data show. Supplies were at a record deficit of 49.4 percent to the five-year average and 47.9 percent to year-earlier inventories.
Marketed gas production may rise 2.5 percent to an all-time high of 71.96 billion cubic feet a day in 2014, gaining for a ninth consecutive year, government data show.
The U.S. has already approved the export of as much liquefied natural gas as Europe uses each day, President Barack Obama said at a news conference in Brussels today.
“It’s going through private companies who get these licenses and they make decisions on the world market about where that energy is going to be sold,” Obama said.