Natural Gas Falls 8% on Mild Weather in Midwest, Northeast
New York, Oct. 28 (Bloomberg) -- Natural gas fell 8 percent,
the biggest drop in almost two months, on expectations that mild
weather will reduce demand in regions of the U.S. that are the
biggest users of the fuel for home heating.
Above-normal temperatures are expected in the Midwest from
Tuesday through Saturday next week -- with normal readings
forecast for the most of the Northeast -- the National Weather
Service said late yesterday. An earlier six-to-10 day forecast
had called for normal to below-normal temperatures.
Milder weather is the main reason ``we're off today,' said
Chris Schachte, an analyst at GSC Energy Corp. in Atlanta. ``The
Midwest is the main consuming focus and the Northeast is a close
second.'
Natural gas for December delivery at the Henry Hub in
Louisiana fell 25.8 cents to $2.965 per million British thermal
units on the New York Mercantile Exchange, the contract's lowest
closing price in three weeks. It was the biggest one-day drop
since Sept. 2.
Prices had risen during the two previous sessions on
expectations of only a small gain in U.S. inventories last week,
before the start of the peak-demand winter season.
``The natural gas market is very volatile anyway,' Schachte
said, referring to this week's price swings.
Gas supplies rose 13 billion cubic feet last week to
2.99 trillion cubic feet, the American Gas Association reported
after trading yesterday. It was the smallest increase since April
and less than the gain of 36 billion cubic feet a year earlier.
U.S. gas inventories typically peak in late October or early
November, as utilities and distributors build stocks for winter.
In addition to the forecast for mild weather in coming days,
the National Oceanic and Atmospheric Administration on Tuesday
said it expects that most of the U.S. will have another milder-
than-normal winter, reducing heating demand.
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