Natural gas in New York fell to the lowest in more than four months amid speculation inventories expanded as demand dropped and domestic production increased.

Inventories gained 71 billion cubic feet in the week ended July 25, according to the median of 11 analyst estimates compiled by Bloomberg News.

The average change for this time of year over the last five is an increase of 55 billion. "The supply side is outperforming, while the demand side is underperforming," said George Hopley, an analyst at Barclays Capital Inc. in New York. "Demand hit a plateau when we didn't get a heat wave in July."

Natural gas for September delivery fell 10.5 cents, or 1.2 percent, to $9.025 per million British thermal unit at 11:32 a.m. on the New York Mercantile Exchange. Futures earlier touched $8.81, the lowest intraday price since $8.664 per million Btu on March 20.