Natural gas fell in New York before a government report tomorrow that will probably show an above- average increase in U.S. stockpiles, as the recession reduced demand for the industrial fuel. The Energy Department may say gas inventories rose 114 billion cubic feet in the week ended May 22, according to the median of four analyst estimates compiled by Bloomberg. Factory and power-plant consumption, which account for 58 percent of U.S. gas demand, has fallen as the economy contracted. “We’re looking for another huge injection this week and the price seems to be getting stuck ahead of that,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “Supplies are still weighing it down.” Natural gas for June delivery fell 3.2 cents, or 0.9 percent, to $3.505 per million British thermal units at 9:19 a.m. on the New York Mercantile Exchange. Gas has dropped 38 percent this year. The June futures contract expires today. The more heavily traded July futures fell 3.5 cents, or 1 percent, to $3.608. The five-year average inventory change for mid-May is a gain of 91 billion cubic feet, according to the Energy Department, which is scheduled to release its weekly supply update at 10:30 a.m. tomorrow in Washington. “We’re waiting to see some signs of either demand going up or that the cuts in production are starting to take a toll on supplies,” Flynn said. Overall U.S. gas consumption will probably contract 1.9 percent this year on reduced demand from factories, the Energy Department said earlier this month. Gas inventories for the week ended May 15 were 22 percent higher than the five-year average as industrial users trimmed purchases, an Energy Department report showed on May 21.

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