Natural gas fell in New York on speculation a government report tomorrow may show stockpiles are above average for this time of year as demand slows because of the U.S. recession. A survey of analysts compiled by Bloomberg showed an expected stockpile decline of 152 billion cubic feet in the week ended Dec. 26, based on the median of four estimates. A drop that size would put inventories at 2.868 trillion cubic feet, above the five-year average of 2.821 trillion. “I don’t think the number is going to be as bad as everyone expects” after temperatures rose in the Northeast, said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “And with more and more plants shutting down for prolonged periods of time, demand is down.” Natural gas for February delivery fell 20.5 cents, or 3.4 percent, to $5.879 per million British thermal units at 10:25 a.m. on the New York Mercantile Exchange. Futures have dropped 21 percent this year. The U.S. Energy Department is scheduled to issue the weekly supply report at noon New York time tomorrow. Traders are awaiting the report to determine whether cold-weather demand dented supplies as much as analysts expect, said Rose. Stockpiles may have declined 148 billion cubic feet in the week ended Dec. 26, more than the five-year average withdrawal of 100 billion, Martin King, an analyst at FirstEnergy Capital Corp. in Calgary, said in a note today. Supplies normally decline during the cold-weather months, when demand is highest. Industrial Use Falls A recession in the U.S. has reduced demand from industrial users of the fuel, keeping supplies at above-average amounts for this time of year. Usage also slows in the U.S. over the Christmas and New Year’s holidays as more facilities close. Stockpile declines have topped analyst expectations in each of the previous two weeks, though speculators have been restrained in their reaction, King said. “Market reaction, rightly, has been muted for the most part with thin holiday trading and steady concerns over economic activity weighing on natural gas prices,” he said. Confidence among U.S. consumers unexpectedly dropped in December to a record low as Americans became more concerned about jobs, raising the risk that spending will keep weakening into 2009. The Conference Board’s index of consumer confidence fell to 38, the lowest level since records began in 1967, from 44.7 in November, the New York-based private research group said today. Another report showed declines in property values accelerated.

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