April 21 (Bloomberg) -- Natural gas futures dropped from an eight-week high in New York as forecasts showed warmer weather that would limit demand for the fuel, boosting the pace of refilling stockpiles from an 11-year low.
Gas slid 0.9 percent after climbing to $4.789 per million British thermal units, the highest intraday priced since Feb. 26. Commodity Weather Group LLC in Bethesda, Maryland, predicted mostly average or above-normal temperatures in the contiguous U.S. through April 25. Inventories of the heating and power- plant fuel totaled 850 billion as of April 11, the lowest for that period since 2003, government data show.
“We have minimal seasonal demand,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “If we do start to see some healthy storage injections as we get into May, the bulls will face some headwinds.”
Natural gas for May delivery fell 4.4 cents to settle at $4.697 per million British thermal units on the New York Mercantile Exchange. Volume for all futures traded was 37 percent below the 100-day average at 2:36 p.m. Prices are up 11 percent this year.
The low in New York on April 25 may be 49 degrees Fahrenheit (9 Celsius), 1 more than average, and the high may be 67, according to AccuWeather Inc. in State College, Pennsylvania.
About 49 percent of U.S. households use gas for heating, with the biggest share in the Midwest, according to the Energy Information Administration, the Energy Department’s statistical arm.
“Milder temperatures this week may allow a more robust storage injection than what we’ve seen so far and that might be prompting some weaker cash prices as well as some short-term profit taking out of the futures market,” Tim Evans, an energy analyst at Citi Futures in New York, said in a note to clients.
U.S. marketed gas production may climb 3 percent this year to an all-time high of 72.29 billion cubic feet a day, the EIA said April 8 in its monthly Short-Term Energy Outlook report.
Gas inventories were 54.3 percent below the five-year average and 50 percent less than the year-earlier total as of April 11, EIA data show.
Supplies may reach 3.422 trillion cubic feet at the end of October, down 392 billion from a year earlier, according to the EIA.