Natural Gas Futures Decline in New York on Forecasts of Milder Weather
Natural gas futures fell for the first day in three on forecasts of moderating temperatures that may reduce demand for the heating fuel.
Futures declined as temperatures may be normal or above- normal in the eastern U.S. during the first week of January, according to MDA Federal Inc’s EarthSat Energy Weather in Rockville, Maryland. MDA predicted last week colder-than-normal weather in the Mid-Atlantic and Southeast.
“It’s a simple function of people reacting to the weather and thin trading ahead of the holidays,” said Mike Rose, the director of energy trading for Angus Jackson Inc. in Fort Lauderdale, Florida. “The market’s just going to sit around the $4.20 area, give or take 20 cents.”
Natural gas for January delivery fell 7.3 cents, or 1.7 percent, to $4.164 per million British thermal units at 10:33 a.m. on the New York Mercantile Exchange. The futures have dropped 0.4 percent this month a1nd 25 percent this year.
The low temperature in New York on Jan. 1 may be 33 degrees Fahrenheit (1 Celsius), 6 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. The low temperature in Philadelphia may be 32 degrees Fahrenheit, 5 degrees above normal.
About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.
U.S. gas stockpiles totaled 3.561 trillion cubic feet for the week ended Dec. 10, 9.9 percent above the five-year average and 1 percent below last year’s level. The Energy Department may report a larger-than-average reduction in gas inventories this week because of cold weather last week in the eastern and central U.S., analysts predict.
The department may say Dec. 23 that 181 billion cubic feet of gas were withdrawn from storage during the week ended Dec. 17, according to the median of four analyst estimates compiled by Bloomberg. The five-year average withdrawal from inventories is 136 billion.
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