- Record seasonal stockpile gain 'is weighing on the market'
- East Coast weather may be mostly normal through Oct. 4
Picture-perfect fall weather in New York was bad news for natural gas bulls as futures capped a second straight weekly decline.
Temperatures may be mostly normal on the East Coast through Oct. 4, a forecast that suggests low demand for power-consuming air conditioners and no need for heating, Commodity Weather Group LLC said. New York will enjoy mild temperatures, plenty of sunshine and only a slight chance of rain over the period, according to the National Weather Service.
A government report Thursday showed gas stockpiles rose by 106 billion cubic feet to 3.44 trillion in the week ended Sept. 18, a record gain for the period. Analyst forecasts compiled by Bloomberg had predicted an increase of 99 billion.
”We’re getting into the season of lower demand,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. ”The bigger-than-anticipated storage injection is weighing on the market.”
Natural gas for October delivery fell 2.7 cents, or 1 percent, to $2.564 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since April 28. Volume for all futures traded was 8.2 percent below the 100-day average at 3:30 p.m. Gas slid 1.6 percent this week and is down 11 percent this year.
Gas inventories were 4.5 percent above the five-year average as of Sept. 18. Supplies have been at a surplus to the norm since week ended May 29.
The high temperature in New York on Oct. 3 may be 67 degrees Fahrenheit (19 Celsius), 1 less than average, and the low may be 49 degrees, AccuWeather Inc. data show. Power plants account for about 33 percent of gas demand, and 49 percent of U.S. households use the fuel for heating.
The Energy Information Administration cut its forecast for average 2015 gas prices at the benchmark Henry Hub in Erath, La., to $2.84 per million Btu from $2.89, the agency said Sept. 9 in the monthly Short-Term Energy Outlook report. Production may rise 5.7 percent this year to average a record 78.95 billion cubic feet a day.