U.S. natural gas futures dropped to a seven-week low as milder weather followed a burst of extreme cold in the Northeast.
A warm spell supplanted the weekend’s record-breaking cold from New York to Boston. Forecasts from Commodity Weather Group LLC show no sustained freeze in the lower 48 states through March. 1.
Gas prices are tumbling as the biggest stockpile glut since 2012 threatens to overwhelm demand for the heating fuel into the second half of the year. Without prolonged frigid weather, output from shale formations will fill storage caverns across the U.S.
“The lack of sustained winter cold is keeping prices under pressure,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “We have strong production levels and a record amount of gas in the ground for the time of year.”
Natural gas for March delivery fell 6.3 cents, or 3.2 percent, to $1.903 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since Dec. 22. Prices are down 19 percent this year.