- `You can't really call the bottom yet,' analyst says
- Analyst estimates are for triple-digit stockpile increase
Natural gas futures fell to a five-month low as mild U.S. weather forecasts for the first half of October dashed hopes of early heating demand.
Temperatures may be mostly normal in the eastern half of the U.S. from Oct. 5 through Oct. 14, according to MDA Weather Services. Gas stockpiles totaled 3.44 trillion cubic feet as of Sept. 18, 4.5 percent above the five-year average and 15.7 percent above the year-ago level.
“It’s pretty mild out,” Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut, said by phone. “If we keep seeing this stuff, you can’t really call the bottom yet.”
Natural gas for November delivery fell 6.2 cents, or 2.4 percent, to $2.524 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since April 28. Gas is down 13 percent this year and 6.1 percent this month, capping a third straight monthly drop. The lowest closing price of the year, $2.49, came on April 27.
Stockpiles may increase by 101 billion cubic feet in a government report scheduled for release Thursday, according to the median of 14 analyst estimates compiled by Bloomberg. Storage levels rose 106 billion cubic feet in the week ended Sept. 18, the Energy Information Administration said last week.
“If we see triple-digit injections line up for two, four weeks in a row, I think the market is going to have a downward bias,” McGillian said.