Sept. 11 (Bloomberg) -- Natural gas futures fluctuated in New York on forecasts for warmer-than-normal weather that may increase demand for the power-plant fuel.
Gas rose as much as 0.9 percent and fell 1.6 percent as East Coast temperatures climbed. A midday update to a National Weather Service forecast model showed above-normal heat in most of the lower 48 states Sept. 16 through Sept. 25, according to MDA Weather Services. Hurricane Humberto formed in the eastern Atlantic and a low-pressure area over Mexico’s Yucatan Peninsula may move into the Bay of Campeche, the U.S. National Hurricane Center said.
“We’re seeing a surge in power demand for natural gas with this heat,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “We have the first hurricane of the season and an area of unsettled weather in the western Caribbean that could develop in the next few days.”
Natural gas for October delivery rose 0.7 cent, or 0.2 percent, to $3.591 per million British thermal units at 1:47 p.m. on the New York Mercantile Exchange. Trading volume was 1.2 percent below the average for the time of day. Prices are up 7.2 percent this year.
The discount of October to November futures narrowed 0.3 cent to 7.5 cents. October gas traded 31.3 cents below the January contract, compared with 32.3 cents yesterday.
November $4.50 calls were the most active options in electronic trading. They were unchanged at 0.6 cent per million Btu on volume of 3,111 at 1:52 p.m. Puts accounted for 50 percent of trading volume. Implied volatility for October at- the-money options was 29.67 percent at 1:45 p.m., compared with 30.05 percent yesterday.
Temperatures along the East Coast today rose past 90 degrees Fahrenheit (32 Celsius). The high in St. Louis on Sept. 18 may be 82, 2 more than usual, said AccuWeather Inc. in State College, Pennsylvania. Power generation accounts for 32 percent of U.S. gas demand, according to the Energy Information Administration, the Energy Department’s statistical arm.
Humberto, just west of the Cape Verde Islands, is the first Atlantic hurricane of the season. Tropical Storm Gabrielle is about 65 miles (105 kilometers) west of Bermuda with maximum sustained winds of about 45 miles per hour. A large area of thunderstorms moving toward the Bay of Campeche has a 70 percent chance of becoming a tropical system over the next five days.
The Gulf of Mexico will account for 5.6 percent of U.S. gas production this year, EIA data show. Today is the statistical peak of the Atlantic hurricane season, according to the hurricane center.
An EIA report due at 10:30 a.m. tomorrow in Washington may show supplies rose by 67 billion cubic feet last week, according to the median of 20 analyst estimates compiled by Bloomberg. The five-year average gain is 62 billion. Stockpiles increased by 27 billion in the same period last year.
Inventories totaled 3.188 trillion cubic feet in the week ended Aug. 30, 1.4 percent above the five-year average and 6.2 percent below last year’s supplies, EIA data show.
The U.S. met 87 percent of its own energy needs in the first five months of 2013, on pace to be the highest annual rate since 1986, according to EIA data.
--Editors: Charlotte Porter, Margot Habiby