Natural gas dropped from a 10-month high in New York on speculation that an expected cold spell won’t be enough to make up for a drop in demand.
Futures fell as much as 4.1 percent. Commodity Weather Group LLC in Bethesda, Maryland, predicted below-normal temperatures in the central U.S. and mid-Atlantic states over the next six to 10 days. Gas has rallied 89 percent from a decade low in April as an unusually hot summer and switching from coal drove record demand from power plants.
“The market is keeping a close eye on some of that electric-power-sector demand starting to taper off as people switch back to coal,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Natural gas for November delivery declined 11.6 cents, or 3.2 percent, to $3.501 per million British thermal units at 1:03 p.m. on the New York Mercantile Exchange after rising to $3.648, the highest intraday price since Dec. 2.
“We did manage to take out Friday’s high by one tick and that’s all we are going to manage to muster today,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The momentum does appear to have started to run out. The higher the market goes, the more the fundamentals fall apart.”Copyright © 2013 Paddock Publications, Inc. All rights reserved.