Rocco: just saw this on Bloomberg site. Thought it may be of interest. Nothing new just the same ol same ol. Typical info for this time of year.

Natural Gas Falls in New York as Recession Cuts Industrial Use

By Reg Curren

March 17 (Bloomberg) -- Natural gas fell for the eighth time in nine days in New York amid concern demand for fuels will deteriorate further during the recession in the U.S.

Gas usage declined in an economy battered by a slump in demand for manufactured goods and an increase in the unemployment rate to 8.1 percent in February. The worsening job picture may prompt the Federal Reserve’s Open Market Committee, meeting today and tomorrow, to take additional steps to steady the economy.

“Fundamentally, it looks terrible for gas and there’s so much supply,” said Brad Florer, a trader at Kottke Associates Inc. in Louisville, Kentucky. “I’m not looking at anything economically in a very bullish posture. It still all looks pretty bad to me.”

Natural gas for April delivery fell 3.8 cents, or 1 percent, to settle at $3.812 per million British thermal units at 2:58 p.m. on the New York Mercantile Exchange. Gas futures have declined 32 percent this year and are down 72 percent since reaching a 2008 high of $13.694 on July 2.

Production at factories, mines and utilities in the U.S. dropped 1.4 percent in February after a revised 1.9 percent decline in January, the Federal Reserve said yesterday. Industrial users and power plants each account for about 29 percent of gas consumption, Energy Department data show.

Industrial gas use will tumble about 6 percent to 17.1 billion cubic feet a day this year, the department said March 10 in its monthly Short-Term Energy Outlook. The estimate was down from 17.3 billion forecast in February.

Nucor Cutback

Nucor Corp., the largest U.S. steelmaker by market value, revised its first-quarter forecast from a profit to a loss because of lower-than-expected demand. Nucor’s steel mills will run at about 43 percent of capacity in the first quarter, down from 48 percent in the previous period, the company said today.

U.S. steel plants operated at 41 percent of capacity in the week ended March 14, compared with 90 percent in the same period a year earlier, the American Iron and Steel Institute said yesterday.

Gas inventories last week were 13 percent higher than the five-year average, a department report showed on March 12.

Above-average stockpiles and weak industrial demand will keep prices lower, said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston.

“There’s plenty of gas out there,” he said. “Natural gas prices should remain subdued over the next several months.”

Industrial demand in February was down about 2 billion cubic feet a day, or 11 percent, from the same month a year earlier, said Horwitz.

He expects stockpiles at the end the winter heating season in two weeks to total about 1.7 trillion cubic feet, which may strain storage facilities later this year and keep a glut of supply. Stockpiles are increased between April and October for use during the cold-weather months, when demand is highest.

Inventories last week probably fell 25 billion cubic feet, according to the median of five analyst estimates compiled by Bloomberg. The average decline for the week is 61 billion, according to the Energy Department.

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

Last Updated: March 17, 2009 15:39 EDT