Natural gas declines on forecasts for below-normal temperatures

Natural gas futures fell in New York as forecasts for below-normal Midwest temperatures early next month signaled reduced demand.

Natural gas declined as much as 2.5 percent after Commodity Weather Group LLC in Bethesda, Maryland forecast mild weather for the Midwest in the first two weeks of June. Temperatures will fall as low as 70 degrees Fahrenheit (21 Celsius) in Chicago on June 4, 6 degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania.

“We get three to five days of hot weather, then everything shifts to normal to below-normal temperatures,” said Gene McGillian, an analyst and broker with Tradition Energy in Stamford, Connecticut. “The middle part of the month is going to be like that, and that’s why gas prices are under pressure.”

Futures for June delivery declined 8.7 cents, or 2.1 percent, to $4.15 per million British thermal units as of 9:24 a.m. on the New York Mercantile Exchange. Futures trading was 75 percent above the 100-day average for the time of day.

The June contract expires today. The more actively traded July gas contract slid 8.6 cents, or 2 percent, to $4.198.

Natural gas storage levels grew by 89 billion cubic feet to 2.053 trillion in the seven days ended May 17, the Energy Information Administration reported last week. A deficit to the five-year average narrowed for a third consecutive week, dropping to 3.9 percent from 4.1 percent.