Natural gas futures fell in New York after a government report showed that U.S. inventories advanced more than analysts expected as the recession cuts into demand for the industrial fuel. Supplies rose 20 billion cubic feet in the week ended April 3 to 1.674 trillion cubic feet, the Energy Department said. Analysts expected a gain of 14 billion. Inventories were 23 percent higher than the five-year average compared with a 22 percent surplus in last week’s report. The average change over the past five years is an increase of 13 billion cubic feet. “All of the data points we get are incrementally negative,” said Tom Orr, research director at Weeden & Co. a brokerage in Greenwich, Connecticut. “Gas will continue to be plagued by its own woes. We’re probably going to work our way down to the lower $3s and maybe even $3.” Natural gas for May delivery fell 1.9 cents, or 0.5 percent, to $3.611 per million British thermal units at 11:02 a.m. on the New York Mercantile Exchange. Gas has declined 36 percent this year and is down 74 percent from a 2008 high of $13.694 reached on July 2. Weeden cut its full-year price forecast for natural gas to $4 per million Btu from $4.75 because of sluggish demand from manufacturers and power generators. Futures will average $3.50 per million Btu in this quarter and the next, Ellen Hannan, an energy analyst at Weeden, said in an April 6 report. Gas consumption by factories may drop 6 percent this year as the recession cuts demand, the department said last month. Storage operators and utilities injected 2.178 trillion cubic feet between April and November 2008. A similar rebuilding of inventories this year would put stockpiles at 3.83 trillion cubic feet by Oct. 31, 8 percent above the record 3.545 trillion in storage on Nov. 2, 2007.

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