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SF: Natural Gas Futures Drop for Third Day on Mild Weather Outlook
 
June 15 (Bloomberg) -- Natural gas futures declined for a third day in New York on forecasts of moderating temperatures in the eastern U.S. that may limit demand for the power-plant fuel.

Gas slipped as much as 1.3 percent after forecasters including Commodity Weather Group predicted mostly normal temperatures in the Northeast and upper Midwest through June 19 after a hot start next week. Mild weather is also likely in parts of the Midwest through June 24, according to the Bethesda, Maryland-based company.

"Temperatures in the Midwest are ridiculously cool for June," said Phil Flynn, vice president of research at PFGBest in Chicago. "We're going to have a whole week of air conditioners sitting idle."

Natural gas for July delivery fell 1.7 cents, or 0.4 percent, to $4.564 per million British thermal units at 9:42 a.m. on the New York Mercantile Exchange. The futures have declined 12 percent from a year ago.

The high temperature in Chicago on June 24 may be 74 degrees Fahrenheit (23 Celsius), 9 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in New York may be 81, matching the normal temperature.

Power plants use about 30 percent of the nation's gas supplies, according to the Energy Department.

U.S. nuclear-power production rose as Xcel Energy Inc. boosted the Prairie Island 1 reactor in Minnesota, the Nuclear Regulatory Commission reported.

Power generation increased 50 megawatts from yesterday to 92,013 megawatts, or 91 percent of capacity, according to the NRC report today and data compiled by Bloomberg. That's 2.1 percent below the total a year ago. Ten of the 104 U.S. reactors were offline.

Some reactors are closed for maintenance and refueling during the spring and fall in the U.S., when demand for heating and cooling is lower. The outages can increase consumption of natural gas and coal to generate electricity.



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