June 20 (Bloomberg) -- Natural gas futures dropped for a sixth day in New York on forecasts of moderating temperatures that would limit demand for the power-plant fuel.
Gas declined after companies including MDA EarthSat Weather in Rockville, Maryland, predicted mostly normal temperatures across the continental U.S. from June 25 through June 29.
“The dominating factor is always the weather, and if temperatures are moderating, that’s going to provide some downward pressure for the market,” said Brad Florer, a trader at Kottke Associates LLC, an energy trading company in Louisville, Kentucky.
Natural gas for July delivery fell 0.8 cent to settle at $4.317 per million British thermal units on the New York Mercantile Exchange. The futures have declined 14 percent from a year ago.
Prices earlier rose as much as 1.2 percent on forecasts of hotter-than-normal weather in the central U.S. from June 30 through July 4.
The high temperature in New York on June 28 may be 81 degrees Fahrenheit (27 Celsius), 1 below normal, according to AccuWeather Inc. in State College, Pennsylvania. The high in Houston may be 94 degrees, 2 above normal.
Hot weather forecast for this week along the East Coast won’t be as severe as two weeks ago, and there probably won’t be any heat waves for the region into July, said Matt Rogers, president of Commodity Weather Group LLC.
“Hot weather in the short-term is still expected to be much less impressive than the event two weeks ago in the Midwest and East,” Rogers, who is based in Bethesda, Maryland, said in a note to clients today. “Otherwise, the six-to-15-day period is still lacking significant heat potential in the Midwest, East, and South.”
Cooling demand in the north-central U.S. may be 7 percent below normal from June 26 through June 30, David Salmon, a meteorologist at Weather Derivatives in Belton, Missouri, said in a note to clients today.
Power plants use about 30 percent of the nation’s gas supplies, according to the Energy Department.
Gas inventories are below average levels for this time of year. Stockpiles rose 69 billion cubic feet in the week ended June 10 to 2.256 trillion, 3.3 percent below the five-year average for the week and 10.9 percent below year-earlier levels, according to the Energy Department.
The number of U.S. natural gas rigs dropped by nine to 870 last week, the lowest level since May 20, according to data released June 17 by Baker Hughes Inc.
The combined oil and gas rig count rose by five to 1,860, the highest level since November 2008, the Baker Hughes data showed.
Oil rigs jumped by 15 to 984, the ninth consecutive time the count has reached the highest level since at least 1987, according to the Houston-based company.
Gas futures volume in electronic trading on the Nymex was 202,242 as of 2:38 p.m., compared with the three-month average of 316,000. Volume was 263,673 on June 17. Open interest was 991,893. The three-month average open interest is 951,000.
The exchange has a one-business-day delay in reporting open interest and full volume data.
--With assistance from Brian K. Sullivan in Boston and Margot Habiby in Dallas. Editors: Bill Banker, Richard Stubbe
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