US gas prices drop to three-year low amid outlook for balmy Christmas
By CHRISTINE BUURMA
Bloomberg
Prospects for a white Christmas are dimming as warm weather sweeps the US East, and that means slumping prices for natural gas.
Gas tumbled below $2/MMBtu for only the second time in three years as forecasts showed above-normal temperatures that would suppress heating demand through late December.
The high in New York on Dec. 25 may be 53 degrees Fahrenheit (12 Celsius), 13 more than average, AccuWeather data show.
It will take frigid weather to erode a gas inventory surplus that has lingered since May. Stockpiles reached an all-time high last month, and supply from shale drillers is sending production toward a fifth straight annual record.
“Prices are going to continue to head lower without any significant weather demand on the horizon,” said Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami. “Production is setting records, and we have ample quantities of gas in storage ahead of the winter.”
Natural gas for January delivery fell 4.4 cents, or 2.2%, to $1.971/MMBtu at 9:22 a.m. on the New York Mercantile Exchange. Futures dropped to $1.959 in earlier trading, the lowest since April 2012. Gas is down 32% this year, heading for a second straight annual decline.
Comments