NEW YORK - Natural gas futures dropped in New York for the first time in five days on forecasts of cooler weather that would limit demand from power plants.
Gas slid as much as 1.8 percent as Commodity Weather Group LLC in Bethesda, Maryland, predicted mostly normal or below- normal temperatures in the eastern and southern U.S. from Sept. 10 to Sept. 14 after hot weather this week. Cooling demand in the U.S. may be 12 percent lower than average from Sept. 11 to Sept. 15, according to Weather Derivatives in Belton, Missouri.
“The forecasts for the second half of September are normal to below normal after we make our way through the next three to five days of heat,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Gains are going to be elusive as seasonal demand drops off.”
Natural gas for October delivery fell 4.2 cents, or 1.5 percent, to $2.812 per million British thermal units at 9:30 a.m. on the New York Mercantile Exchange. The futures have declined 5.9 percent this year.
The high in New York on Sept. 11 may be 76 degrees Fahrenheit (24 Celsius), 1 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Houston may be 90 degrees, matching the usual reading.
Electricity producers account for about 36 percent of U.S. gas consumption, according to the Energy Department.
Gas inventories totaled 3.374 trillion cubic feet in the week ended Aug. 24, 12 percent above the five-year average, the Energy Department said Aug. 30 in a weekly stockpile report. The injection of 66 billion cubic feet was the biggest since the week ended June 8.
Department data scheduled for release tomorrow may show supplies rose by 39 billion cubic feet last week, compared with a five-year average gain of 60 billion, according to the median of five analyst estimates compiled by Bloomberg.
Natural gas production in the lower 48 U.S. states fell 0.2 percent in June to 72.37 billion cubic feet a day from May, the Energy Department’s Energy Information Administration said Aug. 31 in its monthly EIA-914 report. Output in Louisiana rose 3 percent to 8.57 billion cubic feet a day, a five-month high.
About 29 percent of natural gas production from the Gulf of Mexico is still shut because of Hurricane Isaac, the Bureau of Safety and Environmental Enforcement said yesterday. About 1.31 billion cubic feet of gas per day had been shut in, down from 1.74 billion on Sept. 3.
Production lost because of Isaac totals about 31.4 billion cubic feet of natural gas, LCI Energy Insight, an energy analysis company in El Paso, Texas, said in a notice on its website today.
The Gulf accounted for about 7 percent of U.S. gas production in 2011, compared with 11 percent in 2008, Energy Department data show.
The shale gas boom helped the U.S. meet 81 percent of its energy demand in 2011, the most since 1992, according to department data compiled by Bloomberg. Shale producers use a technique known as hydraulic fracturing, or fracking, which involves pumping water, sand and chemicals underground to extract gas embedded in the rock.