US GAS: Futures Fall As Spring Dip In Gas Demand Weighs

NEW YORK (Dow Jones) - Natural gas futures ended slightly lower Monday, setting two days of gains as the anticipation of spring term in the demand for heating oil offset rising forecasts of cold in late March .
Natural gas for April delivery was 0.7 percent, or 0.2% less, at $ 4161 a million British thermal units on the New York Mercantile Exchange.
The futures rose early Monday as high as $ 4.23/MMBtu, the highest intraday price since early February, before falling back as traders focused on the spring season on the shoulder of low demand.
"Given the fact that you are at the intermediate station at this time, do not think a blast of cold air any reason to push gas higher," said Chris Jarvis, president of Caprock Risk Management. "I think people left on the sidelines at this time."
Weather was cold on Monday through some major Northeast markets of heating and the upper Midwest. Private forecaster MDA EarthSat temperature is colder than normal extending from the Great Lakes through the Mid-Atlantic and Northeast during the last days of March.
"There will be plenty of demand for heating associated with this cold, with temperatures in the 30 and 40 years on from Chicago to Boston for most of the time," wrote MDA meteorologists in a note to clients.
The benchmark contract on Friday ended a five weeks as a weekly drawing surprisingly large inventories of traders who had bet prices would fall sent scrambling to buy back these positions. Some operators had ruled late winter heating needs after weeks of forecasts always mild, and surprise in the data sent futures higher by 7.1% in the week.
Gas also received some support last week on speculation that Japan's nuclear crisis would increase demand for gas and other fuels for power plants, but the impact on the U.S. market isolates were expected to be limited.
U.S. remains well-supplied North American production, analysts at Credit Suisse said Monday in a research note, and North America lacks export capacity significantly.
Imports of liquefied natural gas to "less than 2% ... of total U.S. supply," said Morgan Stanley analysts products on Monday. "Of this amount, approximately 70% are engaged and will be served regardless of price."