Natural gas futures declined in New York after orders placed with U.S. factories fell, signaling that natural gas demand from manufacturers may be slow to return following the worst recession since the Great Depression. Orders declined 1.4 percent in May, more than forecast and the largest decline since March 2009, the Commerce Department said today in Washington. Industrial users account for about 28 percent of gas usage, according to the Energy Department. “We need demand,” said Michael Rose, director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “Until we get some economic numbers that create demand, natural gas is going to tread water between $4 and $5 all summer long.” Natural gas for August delivery fell 9.1 cents, or 1.9 percent, to $4.763 per million British thermal units at 10:43 a.m. on the New York Mercantile Exchange. Gas prices have dropped 14 percent this year on forecasts that U.S. inventories will be near record highs at the end of the injection season in October. Stockpiles will reach 3.805 trillion cubic feet in October, the Energy Department estimated in its monthly Short-Term Energy Outlook on June 8. Supplies rose to a record 3.84 trillion cubic feet in November 2009. Gas inventories rose 60 billion cubic feet to 2.684 trillion in the week ended June 25, the Energy Department reported yesterday. “It’s a push-me, pull-me toy,” Rose said. “Traders are torn between the long-term love of natural gas, and the worry of missing out on that trade, and the realization that for right now, there is no demand.” Clean Fuel President Barack Obama’s support for clean energy, including expanded use of natural gas, will spur demand for the fuel, Rose said. The question is when that will happen, he said. Rising gas prices may be a “late 2011” story, he said. Traders are waiting to see whether above-normal temperatures will dent rising stockpiles, said Teri Viswanath, director of commodities research for Credit Suisse Securities USA in Houston. “While the market continues to remain nervous about high end-of-season storage levels, the fact is we’re only halfway through the injection season and a lot could happen,” Viswanath said. The eastern and western U.S. can expect above-normal temperatures for the next week to 10 days, said Matt Rogers, president of the Commodity Weather Group, LLC in Bethesda, Maryland, in his daily report. “For the Northwest, this should be the hottest weather of the season so far,” Rogers said. “For the East Coast, Midwest, and interior Deep South, this should either match or exceed the hottest weather so far.” 96 Degrees Temperatures in New York are forecast to reach 96 degrees Fahrenheit (36 degrees Celsius) by July 6, according to the National Weather Service. Temperatures in Washington are forecast to reach 100 degrees that day. If temperature forecasts moderate on July 6, when Nymex reopens following the U.S. July 4 holiday weekend, gas will plunge, Viswanath said. To contact the reporter on this story: Asjylyn Loder in New York at aloder@bloomberg.net

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