By Naureen S. Malik
Natural gas futures fell by the most in 11 months in New York on speculation that moderating U.S. weather will limit demand for the heating fuel.
Prices slid 9.5 percent, the biggest decline since Feb. 24. Temperatures from the Great Plains through Florida will be above normal over the next five days, with seasonal or higher readings through Jan. 29, said Commodity Weather Group LLC. An inventory surplus to year-earlier levels widened to a 28-month high, according to a government report last week.
“We are not going to see sustained cold over the next two weeks,” said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. “The market is reflecting the idea that without really bitter cold weather, and with production levels ramping back up to record levels, we can’t really hold gains in a rally.”
Natural gas for February delivery fell 29.6 cents to $2.831 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since Jan. 12. Volume for all futures traded was 52 percent above the 100-day average at 2:34 p.m. Prices have dropped 27 percent since the end of October.
Electronic transactions Monday, when the trading floor was closed for the Martin Luther King Jr. holiday, will be booked with today’s for settlement purposes.Read more