Natural gas futures fell in New York, heading for the first weekly decline in three weeks, on signs that U.S. supplies are ample to meet winter demand for the heating fuel.
More than two thirds of Minnesota homes are heated with natural gas, according to 2000 data from the U.S. Energy Information Administration.
Gas dropped after a government report yesterday showed that inventories of the heating and power-plant fuel were 10 percent above the five-year average for the week ended Nov. 26. The surplus has expanded in eight of the past 10 weeks.
"Storage is near record levels, and Gulf Coast supplies are virtually running at maximum capacity," said Stephen Schork, president of the Schork Group energy advisory company in Villanova, Pennsylvania.
Natural gas for January delivery fell 3.8 cents, or 0.9 percent, to $4.305 per million British thermal units at 1:23 p.m. on the New York Mercantile Exchange. The futures have dropped 2.1 percent this week and 23 percent this year.
Underground storage of natural gas in the Gulf of Mexico producing area is at 97 percent of estimated capacity, according to the Energy Department.
The number of oil and natural-gas rigs operating in the U.S. jumped to a 23-month high, gaining 26 to 1,713, according to data published by Houston-based Baker Hughes Inc.
Gas rigs rose by 8 to 961, Baker Hughes said. The total was down 40 percent from a peak of 1,606 in September 2008.
Gas traders also track economic data for signs of strength or weakness that would affect demand for raw materials.
Employers added fewer jobs than forecast in November and the unemployment rate unexpectedly increased, Labor Department figures showed Friday in Washington. Payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, the department said.
The jobless rate rose to 9.8 percent, the highest since April, while hours worked and earnings stagnated.