Hedge funds reduced bullish bets on natural gas by the most in eight months as forecasts for warmer-than-usual weather in the eastern US signalled a drop in heating-fuel use with supplies near a seasonal record. Money managers cut wagers on rising prices for the first time in seven weeks, reducing positions by 56 per cent in the seven days ended February 28, according to the Commodity Futures Trading Commission\'s Commitments of Traders report. It was the biggest decline since June 28. Gas fell 4.1 per cent in the week covered by the report as meteorologists predicted above-normal temperatures east of the Rocky Mountains through mid-March. Inventories may total 2.34 trillion cubic feet (0.07 cubic metres) by the end of the month, according to the Energy Management Institute in New York, an advisory company. That would be an all-time high for this time of year, Energy Department data going back to 1993 show. \"There\'s just not enough heating demand to keep a firm floor under the market,\" said Tim Evans, an energy analyst at Citi Futures Perspective in New York, in a telephone interview on Friday. \"As long as we have the potential for seeing new highs in the inventory surplus, we have the potential for new lows in natural gas prices.\" Futures slumped 10.7 cents to $2.519 (Dh9.25) per million British thermal units on the New York Mercantile Exchange in the report period and another 4.3 per cent to $2.41 as of Friday. Natural gas is down 19.3 per cent this year, the worst performing commodity in the Standard & Poor\'s GSCI index of 24 raw materials. This winter has been 21 per cent warmer than last year, the mildest this decade, as measured by heating degree days, Christian O\'Neill wrote in a March 2 Bloomberg Industries report. About 51 per cent of US households rely on the fuel for heat, according to the Energy Department. Gas slipped 2.2 cents on February 23 after the Energy Department reported a smaller-than-expected draw on stockpiles. Supplies shrank by 166 billion cubic feet the week ended February 17, compared with analysts\' median estimate of 170 billion. The weather may be warmer-than-normal across most of the continental US through March 16, according to MDA EarthSat Weather in Gaithersburg, Maryland. Heating demand throughout the country may be 32 per cent below normal from March 8 to March 12, data from Weather Derivatives in Belton, Missouri, show. The low temperature in New York on Thursday may be above normal at 8C. \"All signs still suggest that the current winter heating season is going to end with an all-time record high inventory level at the end of the season,\" Dominick Chirichella, senior partner at the Energy Management Institute, said in a note to clients on Thursday. Inventories have remained at seasonal highs also because of hydraulic fracturing, or fracking, in rock formations such as the Marcellus Shale, which stretches from Ohio, across Pennsylvania to New York. Marketed production increased 7.8 per cent last year, the biggest annual gain in history, in large part because of shale gas, the Energy Department said in a report on February 7. Gas stockpiles dropped 82 billion cubic feet to 2.513 trillion in the week ended February 24, compared with the five-year average decline of 118 billion, department data showed on Thursday. The inventory surplus over the five-year average climbed to 45 per cent, the most since May 26, 2006. Net-long positions, or bets on rising prices, in natural gas held by managed money, including hedge funds, commodity pools and commodity-trading advisers, in futures and options combined in four contracts fell by 46,622 futures equivalents to 36,533 in the week ended February 28, the CFTC data showed.