Natural gas futures fell to a 13- month low in New York, capping a fifth straight weekly decline, as mild weather crimped demand, boosting a surplus of the heating fuel. Gas declined after the Energy Department reported yesterday that 93 billion cubic feet of gas were added to U.S. storage in the week ended Oct. 15. The five-year average gain for the week is 54 billion. Above-normal temperatures are likely across most of the eastern U.S. through Oct. 31, according to MDA Federal Inc.’s EarthSat Energy Weather in Rockville, Maryland. “We have no significant weather, so the market’s drifting lower on your typical shoulder-month situation,” said Tom Saal, a broker with Hencorp Becstone Futures in Miami. “Some of the forecasts for the winter are showing above-normal temperatures.” Natural gas for November delivery fell 3.6 cents, or 1.1 percent, to $3.332 per million British thermal units on the New York Mercantile Exchange, the lowest settlement price since Sept. 15, 2009. Gas fell 5.7 percent this week and has declined 40 percent this year. “Weather forecasts continue to provide little support for prices, with above- to much-above-normal temperatures now expected for the eastern half of the country in the next couple of weeks,” Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut, said in a note to clients. The Northeast, Midwest and parts of the West may have warmer-than-normal weather from Nov. 1 through Nov. 5, MDA said. The high temperature in New York on Oct. 27 may be 75 degrees Fahrenheit (24 Celsius), 15 degrees above normal, according to AccuWeather Inc. in State College, Pennsylvania. Record Supplies “Normally, toward the end of October gas prices tend to decline, and it looks like the market is fitting that pattern,” said Veronique Lashinski, a senior research analyst for Newedge USA LLC in Chicago. “We’re going into the winter and the market has been taking the winter premium out, which suggests traders are not seeing a whole lot of risk for supplies.” Stockpiles climbed to a record 3.837 trillion cubic feet last November before colder weather spurred demand and began to reduce supplies. The Energy Department forecast on Oct. 13 that inventories will peak at 3.726 trillion cubic feet by the end of this month, the second-highest level ever for the start of a heating season. Rig Count The number of U.S. gas drilling rigs totaled 965 in the week ended Oct. 22, 33 percent higher than a year earlier, data released today by Houston-based Baker Hughes Inc. showed. Gas output will average 61.29 billion cubic feet a day this year, the most since 1973, according to Energy Department estimates. Tropical Storm Richard was likely to reach Honduras late tomorrow, the National Hurricane Center said in an advisory at about 2 p.m. New York time. Maximum sustained winds were near 40 miles (64 kilometers) per hour, and the storm could become a hurricane over the weekend, the center said. Most storms have bypassed energy production regions of the Gulf of Mexico this year. The Atlantic hurricane season ends on Nov. 30. Wholesale natural gas at the benchmark Henry Hub in Erath, Louisiana, fell 27.48 cents, or 7.9 percent, to $3.1856 per million Btu on the Intercontinental Exchange. Gas futures volume in electronic trading on the Nymex was 178,314 as of 2:44 p.m., compared with a three-month average of 268,000. Volume was 307,851 yesterday. Open interest was 818,298 contracts, compared with the three-month average of 807,000. The exchange has a one-business-day delay in reporting open interest and full volume data. To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net; To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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