U.S. Natural Gas Drops as Cold Spell Vanishes From Forecastsby
Early December weather may be warmer-than-normal in U.S. East
Stockpiles rose by 6 billion cubic feet in analyst survey
U.S. natural gas bulls needed more than a brief shot of cold in the Northeast to turn the market around.
Futures are heading for a second straight annual decline as record stockpiles threaten to keep prices depressed through the first half of 2016. Revised forecasts Tuesday showed mild weather that would limit heating demand in the eastern U.S. through the first week of December. Futures climbed from a three-week low Monday as temperatures approached freezing in New York.
“The forecasts have gotten warmer, and the market is responding accordingly,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “With storage at an all-time high and the possibility of a stockpile gain this week, it’s going to be really tough for natural gas to rally.”
Natural gas for December delivery fell 1 cent to settle at $2.20 per million British thermal units on the New York Mercantile Exchange after earlier dropping as much as 3.6 percent. Gas is down 24 percent this year. Prices slipped to $2.051 in intraday trading Monday, the lowest since Oct. 28.
A government report scheduled for release at noon Wednesday in Washington may show gas stockpiles rose by 7 billion cubic feet in the seven days ended Nov. 20, the first storage gain since 2012 for that period, based on the median of 12 analyst estimates compiled by Bloomberg. Inventories totaled a record 4 trillion cubic feet as of Nov. 13.