U.S. natural gas futures slid the most in three months as forecasts showed warmer weather that would curtail demand for the heating fuel.
Temperatures may be mostly above normal in the eastern U.S. following a cold spell this week, according to MDA Weather Services. Gas prices surged to a 13-week high on Friday after a segment of Spectra Energy Corp.’s Texas Eastern interstate pipeline ruptured, disrupting supplies to the Northeast.
“The back half of the 15-day forecast is showing above-normal temperatures, which is why the market is under pressure today,” Bob Yawger, director of the futures division at Mizuho Securities USA in New York, said by phone. “The storage situation is very healthy, so there’s not really a good reason for the market to trade much higher.”
Gas prices have languished near 1990s-era seasonal lows on concern that production from shale formations will fill storage caverns, pushing stockpiles to a record before the winter. Without a hot summer and a drop in gas output, prices are poised to remain under pressure.
Natural gas for June delivery fell 13.6 cents, or 6.2 percent, to settle at $2.042 per million British thermal units on the New York Mercantile Exchange, the biggest one-day drop since Feb. 1. Prices settled at $2.178 on Friday, the highest since Jan. 29.