WSJ: U.S. GAS: Futures Decline as Warmer Weather Seen Ahead
--Natural-gas aims lower as forecasts point to warmer weather
--Gas futures drop 0.9% to $3.371/MMBtu
--Midwest, East Coast, seen warming over next two weeks
By Jerry A. DiColo
NEW YORK--Natural gas futures declined Tuesday as forecasters pointed to warmer weather across much of the U.S. in coming weeks, which would keep a lid on gas-fired heating demand.
Natural gas for November delivery fell 3.3 cents, or 0.9%, to recently trade at $3.371 a million British thermal units on the New York Mercantile Exchange.
Warmer-than-normal temperatures are expected across much of the Midwest and East Coast over the next two weeks, according to the reports of private forecasters Tuesday.
Commodity Weather Group said spikes of "much-above-normal temperatures" in the Midwest are expected in the next six-to-10 days, while the East Coast will see similar weather patterns in the next 11-to-15 days.
WSI Energycast said its six-to-10-day forecast is "warmer over most locations south and east of Chicago than it was yesterday."
Warm weather this time of year typically keeps demand for natural gas low. Gas is used to heat more than half of U.S. homes, and many more use electric heat from gas-fired utilities. Moderate temperatures mean homes and businesses don't need to crank up their heaters.
"Temperature forecasts that we monitor will be providing a significant obstacle" to price gains, said Jim Ritterbusch, head of energy-trading advisor Ritterbusch and Associates, in a client note.
Despite Tuesday's declines, natural-gas futures continue to hold close to $3.40/MMBtu after a surge above $3.50/MMBtu last week. U.S. storage inventories stand at 8.3% above the five-year average for this time of year, well below gas-storage levels that ended March roughly 60% above the five-year average for that time of year.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.1850/MMBtu, according to IntercontinentalExchange, compared with Monday's average of $3.1755/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $3.34/MMBtu, down from $3.3623/MMBtu.
