U.S. Natural Gas Futures Slide Most Since July on Warm Midwestby
U.S. natural gas futures slid the most since July, dragging shares of most major producers down as warmer-than-average weather in the Midwest prompted speculation that a mild winter will curtail demand for the heating fuel.
Rex Energy Corp., Chesapeake Energy Corp. and Southwestern Energy Co. led declines among gas producers. Temperatures will probably be above normal in the central U.S. from Oct. 29 through Nov. 7, while Northeast readings may be closer to average for the time of year, according to the Weather Company. The upcoming November through January will be warmer than usual across the country, except for the Southeast, the forecaster said.
Tumbling gas futures reflect traders’ concern that another no-show winter will leave a glut of the fuel in storage, weighing on prices next year. While declining production from shale basins and record demand from power plants has helped to narrow a supply surplus, stockpiles remain above normal.
“The extended forecast is not helping prices move higher,” John Kilduff, a partner at Again Capital LLC in New York, said by phone. “We’re going into the winter with a substantial amount of gas in storage.”
Gas futures for November delivery fell 16.2 cents, or 5.4 percent, to $2.831 per million British thermal units on the New York Mercantile Exchange, the biggest percentage decline since July 5. The settlement price was the lowest since Sept. 9. Chesapeake, the second-largest U.S. gas supplier, fell as much as 5.8 percent.