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United States News Title: Natural Gas Drops to 15-Week Low on Ample Supply, Mild Weather March 11 (Bloomberg) -- Natural gas futures fell to a 15- week low in New York after a government report showed supplies of the fuel will be ample during milder-than-normal weather at the end of the heating season. Inventories shrank 111 billion cubic feet in the week ended March 5 to 1.626 trillion cubic feet, according to the Energy Department report today. Supplies were 1.2 percent above the five-year average, unchanged from last week’s report. Stockpiles typically drop this time of year as heating needs boost demand. “We’re going to end the heating season a little bit above the five-year average,” said Tom Orr, research director at Weeden & Co., a brokerage in Greenwich, Connecticut. “The cold weather is done and now we don’t have anything. The sense is they’re going to build back up supplies, so why get too excited about it?” Natural gas for April delivery fell 13.1 cents, or 2.9 percent, to $4.442 per million British thermal units at 12:59 p.m. on the New York Mercantile Exchange. The contract touched $4.415, the lowest price since Nov. 24. Gas has declined 20 percent this year. Above-normal temperatures will stretch from the Midwest to the Northeast through March 20, according to MDA Federal Inc.’s EarthSat Energy Weather of Rockville, Maryland. About 52 percent of U.S. households rely on natural gas for heating. Futures will probably trade between $4.50 and $5 per million Btu as the cold-weather-demand period ends this month and inventories begin to increase in April, Orr said. Oil and Commodities Crude oil for April delivery fluctuated in a 99 cent range on signs of a slowing economic recovery. Oil futures dipped 16 cents, or 0.2 percent, to $81.93 a barrel in New York. The Reuters/Jefferies CRB Index of 19 commodities fell for a fourth day, as natural gas and soybeans showed the biggest declines today. The index has shed 1.3 percent this week on increasing speculation that China will slow its expansion to control inflation. Heating requirements in the U.S. will be 23 percent below average from tomorrow through March 18, according to Weather Derivatives of Belton, Missouri. Heating needs will be 25 percent lower than normal in the Northeast and 33 percent below typical levels in the Midwest. Temperatures are forecast to rise in Chicago to a peak of 56 degrees Fahrenheit (13 Celsius) by March 19, with overnight lows ranging from 36 to 40 degrees, according to EarthSat. The typical high for the city is about 47 degrees with a low of 37, according to the National Weather Service. New York Weather New York will see a stretch of temperatures from now through March 20 with highs of 50 to 60 degrees Fahrenheit and lows mostly in the 40s, the EarthSat said. The average high for that period is about 50 degrees with a low of 35. “The weather here has been shockingly mild,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “What most people are looking at is just the fact this is going to mean smaller declines or earlier builds in storage, and that, of course is bearish.” Stockpiles are typically replenished from early April through October to assure sufficient supplies to meet demand in the winter, when consumption outstrips production and imports. U.S. inventory levels for this cold-weather season reached a record 3.837 trillion cubic feet in November as higher output swamped a market where industrial demand was weak because of the recession. Gas prices tumbled to a seven-year low in early September as the worst recession since the 1930s sapped demand and inventories headed toward the record. Gas closed at $2.508 per million Btu on Sept. 3 and then more than doubled through early January as cold weather boosted fuel use. Gas reached a one-year high of $6.009 per million Btu on Jan. 6 and has dropped 26 percent since then.
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