BLBG: Natural Gas Falls in New York as Mild Weather Slices Demand
Natural gas fell for the first time in five days in New York as mild weather forecast for the eastern half of the U.S. will cut demand for the furnace fuel.
Above-normal temperatures will cover the country from Texas to New York through Feb. 14, according to MDA Federal Inc.’s EarthSat Energy Weather. The high in Chicago today may reach 64 degrees Fahrenheit (18 Celsius), about 30 degrees above normal. About 72 percent of Midwest households rely on gas for heat.
“Weather is working against you, not for you now,” said Tom Orr, research director at Weeden & Co. in Greenwich, Connecticut.
Natural gas for March delivery fell 13 cents, or 2.7 percent, to $4.677 per million British thermal units at 10:53 a.m. on the New York Mercantile Exchange. Gas has fallen 17 percent this year and is down 67 percent from a 2008 high of $13.694 per million Btu reached on July 2.
“We still think gas could have a $3 handle here in the spring,” Orr said.
The recession and concern over the effectiveness of a proposed stimulus plan to revive the economy are also weighing on natural gas prices, said Stephen Schork, president of Schork Group Inc. of Villanova, Pennsylvania.
U.S. wholesalers had enough goods on hand to last 1.27 months at the current sales pace, the highest since 2002, the Commerce Department said today in Washington. Bloated inventories suggest sluggish demand in the coming months as companies try to work through stocks of unsold goods.
“If you have that much inventory, factories aren’t going to be keen on hiring workers,” Schork said. “The economy is a mess and it’s not improving.”
Obama Plan
Schork said measures contained in the $838 billion plan proposed by President Barack Obama may take as long as 18 months to show up in the economy and boost energy demand. The Senate may pass its version of the plan today, which will clear the way for negotiations between the House and Senate on a compromise.
Demand for gas to operate factories and produce consumer goods accounted for about 29 percent of industrial consumption in 2007, according to the Energy Department.
Fuel use by manufacturers and factories may fall by almost 1 billion cubic feet a day, or 6 percent, this year from 2008, Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston, said in a report on Feb. 4.
