Feb. 1 (Bloomberg) -- Natural gas supplies probably declined less than the seasonal average last week as mild weather across most of the U.S. crimped demand for the heating fuel, analyst estimates show.
Inventories dropped 129 billion cubic feet, or 4.2 percent, to 2.969 trillion cubic feet in the week ended Jan. 27, based on the median of 17 analyst estimates compiled by Bloomberg. The five-year average change for the week is a decrease of 186 billion, according to the Energy Department, whose weekly stockpile report is due at 10:30 a.m. tomorrow.
Heating demand was 27 percent below normal on average in the U.S. for the week ended Jan. 28, according to Weather Derivatives in Belton, Missouri. The low in Boston on Jan. 27 was 37 degrees Fahrenheit (3 Celsius), 15 degrees above normal, according to AccuWeather Inc. of State College, Pennsylvania.
“Everything right now is being driven by supply and weather,” said Brad Florer, a trader at Kottke Associates LLC in Louisville, Kentucky. “There’s no real buying coming in. This market seems to be searching for a floor.”
Gas has tumbled 9.4 percent this week on forecasts for mild weather. Prices also dropped after Exxon Mobil Corp. said it hasn’t cut drilling even after gas tumbled to the lowest price in 10 years. Prices gained 14 percent last week after Chesapeake Energy Corp. and ConocoPhillips announced production cuts.
All of the analysts predicted that the weekly supply report from the Energy Department’s Energy Information Administration would show a stockpile decrease, with estimates ranging from 115 billion to 136 billion cubic feet.
Natural gas rose 33.5 cents, or 14 percent, to $2.678 per million British thermal units last week on the New York Mercantile Exchange. Gas for March delivery slid 9.1 cents, or 3.6 percent, to $2.412 at 11:19 a.m. today. Prices fell to $2.231 Jan. 23, the lowest intraday price since February 2002.
--Editors: Bill Banker, Charlotte Porter
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