Natural Gas Futures Drop Below $3 for First Time Since 2012 – Bloomberg.
Natural gas futures slumped below $3 per million British thermal units for the first time since 2012 on speculation that record production will overwhelm demand for the heating fuel.
Futures have slid 29 percent this year, heading for the first annual decline since 2011, as mild weather leaves stockpiles at a surplus to year-ago levels for the first time in two years. Temperatures may be mostly above average in the eastern half of the U.S. through Dec. 28, according to Commodity Weather Group LLC.
In the absence of extreme weather, rising production will leave inventories at an all-time high above 4 trillion cubic feet by the end of October 2015, BNP Paribas SA said in a report Dec. 23. U.S. gas production may climb 5.5 percent this year to a fourth consecutive record, government data show.
“This market continues to look oversupplied,” said Aaron Calder, senior market analyst at Gelber & Associates in Houston, said by phone on Dec. 24. “We are seeing support at $3 but I would say that once we break that I think $2.70 is probably our lower technical target.”
