NEW YORK: US natural gas futures slid more than 10% to a near six-month low on Monday, hurt by ample output while mild weather limited heating demand.
Front-month gas futures for January delivery on the New York Mercantile Exchange settled 14.40 cents lower, or 15%, at $2.44 per million British thermal units (mmBtu), its lowest level since mid-June.
The fundamental reasons why the prices are dropping drastically are “record production, higher Canadian exports, lukewarm and late arriving domestic demand, and high foreign gas storage levels,” said Zhen? Zhu, managing consultant at C.H. Guernsey and Co in Oklahoma City.
“I believe the market is betting against a colder than normal winter in January and February, but the market may be reasonable as most of longer term weather forecasts are calling for a warmer than normal if not normal remaining winter.”
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