Natural gas prices plunging because American temperatures staying up
Natural gas prices headed for their worst weekly drop since February as forecasts showed no sign of the teeth-chattering US cold needed to boost demand for the heating fuel.
The outlook for the second week of December has turned warmer, with temperatures now expected to be above normal across most of the US according to forecaster Commodity Weather.
"The trends into mid-month should keep getting warmer" without evidence of a stronger high-pressure area that would allow frigid conditions to settle," CWG said.
As gas output from shale basins climbs to fresh highs, the market needs a polar blast to help siphon off excess supply. Though exports have soared to a record and American homes and businesses are using more of the fuel than ever, production is outstripping demand, leaving stored gas near a two-year high.
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"The weather outlook continues to fall apart for December," says John Kilduff, founding partner at Again Capital. "Futures broke some key support at the $2.50 level. If we get under $2.42, we'll be looking at the $2.20 lows of last month."
Gas for January delivery fell 5.8pc on the New York Mercantile Exchange. Prices were down 12pc last week, heading for the biggest weekly decline since the week ending February 1.
Sunday Indo Business