Natural gas (NYMEX:HPK14) pared the biggest weekly increase in more than a month as forecasts for warmer weather at the start of April signaled reduced fuel demand.
Gas futures slid as much as 1.3 percent in New York as MDA Weather Services said below-normal temperatures will be limited to the Northeast from April 7 through April 11, after earlier forecasts showed the cold sweeping across the East Coast. Prices yesterday jumped the most in five weeks following a government report that showed an above-average stockpile decline.
“It appears the market is rethinking yesterday’s rally as warmer forecast changes offer the possibility for selling,” said Teri Viswanath, director of commodities strategy at BNP Paribas SA in New York. “The expectation is that we are going to have a very strong production surge into the injection season to keep a lid on prices.”
Natural gas for May delivery fell 3.3 cents, or 0.7 percent, to $4.505 per million British thermal units at 12:56 p.m. on the New York Mercantile Exchange. Volume for all futures traded was 56 percent below the 100-day average. Prices are up 4.5 percent this week, heading for the biggest gain since the period ended Feb. 21. Gas has risen 6.5 percent this year.
The high temperature in New York City on April 4 will climb to 61 degrees Fahrenheit (16 Celsius), 4 above normal, AccuWeather Inc. said on its website.
About 49 percent of U.S. households use gas for heating from November through March, according to the U.S. Energy Information Administration. Demand for the fuel slumps after the peak heating season before hotter weather spurs consumption by power plants to run air conditioners.