By Reg Curren
Dec. 22 (Bloomberg) -- Natural gas fell for a fourth day on speculation higher temperatures will reduce demand for the heating fuel beginning later this week.
Warmer weather is expected to build into the Midwest and Northeast after a cold period ends around Dec. 24, according to forecaster MDA Federal Inc.’s EarthSat Energy Weather of Rockville, Maryland. Higher temperatures in the Midwest, where 72 percent of households rely on gas for heating, will limit withdrawals from storage, helping to keep supplies above normal.
“The weather maps look to be warming up,” said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “We’re in holiday markets. No one is willing to take a stand because they want to go away and not think about the market.”
Natural gas for January delivery fell 3.4 cents, or 0.6 percent, to $5.30 per million British thermal units at 9:30 a.m. on the New York Mercantile Exchange. It earlier dropped to $5.22, the lowest since Aug. 27, 2007. Gas futures declined 2.8 percent last week.
The low temperature in Chicago may rise to 20 degrees Fahrenheit (minus 7 Celsius) by Dec. 26 from tomorrow’s forecast minimum of 2 degrees, according to EarthSat.
A recession in the U.S. has cut demand from industrial users of the fuel, keeping supplies at above-average amounts for this time of year. Usage may slow more over the next two weeks as the Christmas and New Year’s holidays prompt plant closures in much of the U.S. and Canada.
“The natural gas market is caught in a bearish trend as a result of the weakening economy,” Peter Beutel, president of Cameron Hanover Inc., an energy consulting company in New Canaan, Connecticut, said in a morning note today.
To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.
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