Natural gas futures fall on milder weather

NEW YORK: Natural gas fell in New York as the outlook for mild January weather signaled lower demand and reduced the first annual gain in five years.

Futures dropped 3.4% as MDA Weather Services in Gaithersburg, Maryland, predicted above-normal temperatures in the eastern US over the next six to 14 days. Gas snapped a four-year losing streak as record demand from power plants during an unusually hot summer helped shrink an inventory glut.

"In the first half of January, the weather on the Eastern Seaboard doesn't look too threatening," Stephen Schork, president of Schork Group, a consulting group in Villanova, Pennsylvania, said. "The surplus is going to be expanding for the next couple of weeks. As soon as we work through the current overhang, we will start to see some semblance of firmness in the markets." Natural gas for February delivery dropped 11.8 cents to settle at $3.351 per million British thermal units on the New York Mercantile Exchange. The futures climbed 12% in 2012 to post the first annual gain since 2007.