By Reg Curren Dec. 5 (Bloomberg) -- Natural gas futures in New York fell to the lowest price in 15 months on weakening demand in a slowing economy. About 42 percent of U.S. gas consumption comes from industrial and commercial users, and another 30 percent is used in electricity generation. Employers last month reduced jobs at the fastest pace since December 1974, shrinking payrolls by 533,000 workers. “This economy hasn’t shown a lot of signs we’ve come near the bottom; it’s still falling apart,” said Brad Florer, a trader at Kottke Associates Inc. in Louisville, Kentucky. “The bears are still in control.” Natural gas for January delivery fell 27.5 cents, or 4.6 percent, to settle at $5.742 per million British thermal units at 3:09 p.m. on the New York Mercantile Exchange. It was the lowest closing price for the heating and industrial fuel since Sept. 7, 2007. Gas futures dropped 12 percent this week, the biggest drop since August. “This was an eye-opening number on jobs today; it’s definitely a big negative,” said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. “People are going to start talking about a deep recession.” Demand from industrial consumers was about 1 billion cubic feet a day, or 6.3 percent, lower in November than a year earlier, Cameron Horwitz, an analyst at Sun Trust Robinson Humphrey in Houston, said in a note today. Steel Production Industrial production in such areas as steel is slumping as the U.S. economy sags. Supplies of gas last week were 69 billion cubic feet, or 2.1 percent, above the five-year average, the Energy Department said yesterday. “Where gas prices go will really depend on where oil goes because it’s the economic bellwether,” said Michael Haigh, head of U.S. commodities research at Societe Generale in New York. “Gas is really following what’s going on in the financial world, the slowdown and the jobs number.” Should the economy worsen further, as much as 2 billion cubic feet a day may be removed from industrial usage, he said. Crude oil for January delivery fell $2.86, or 6.6 percent, to $40.81 a barrel on the New York exchange, the lowest closing price since Dec. 10, 2004. “When crude breaches into new lows, gas has to follow it,” Jarvis said. “The whole sector is being dragged down, so it’s going lower.” To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net

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