Natural gas futures capped a weekly decline in New York after a government report showed a record seasonal increase in U.S. supplies of the power-plant fuel.
Stockpiles rose 90 billion cubic feet in the week ended April 17 to 1.629 trillion, the Energy Information Administration said Thursday, almost double the five-year average increase for the period. Inventories were a record 83 percent above year-earlier levels.
“It looks like we are going into another down trend,” said Stephen Schork, president of Schork Group Inc., a consulting firm in Villanova, Pennsylvania. “We are in a situation where we had back-to-back record builds. I think the very strong pace of injections will likely be maintained over the next two reports.”
Natural gas for May delivery settled unchanged at $2.531 per million British thermal units on the New York Mercantile Exchange. Volume for all futures traded was 50 percent below the 100-day average at 2:42 p.m. Prices dropped 3.9 percent this week.
Gas rose in earlier trading as forecasts showed colder-than-normal weather in much of the eastern half of the U.S. into the first week of May.
Temperatures will be below average from Texas to Massachusetts April 29 through May 3, according to MDA Weather Services. The high in New York on April 30 may be 60 degrees Fahrenheit (16 Celsius), 6 below normal, AccuWeather Inc. said on its website.
“For this time of year you are several degrees below normal,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.
Power plants will burn a record amount of gas in 2015 amid lower prices and the retirement of 23 gigawatts of coal-fired generation because of environmental rules, according to a Bloomberg New Energy Finance report.
“The market’s idea is that fuel-switching from coal to natural gas kicks in at $2.50,” Yawger said. “We really run into some support around that level.”