NEW YORK—Natural-gas futures tumbled with prices aiming at the lowest close in nearly a decade, as persistently mild temperatures across the U.S. keep pressure on gas-fired heating demand.
Natural gas for February delivery recently traded 18.2 cents, or 6.8%, lower at $2.488 a million British thermal units on the New York Mercantile Exchange.
The benchmark contract had fallen as low as $2.473 in earlier trading, on pace to settle below the September 2009 settlement of $2.508 a million British thermal units. A settlement price below that level would be the lowest since 2002.
Prices fell Tuesday for the sixth-straight session as forecasters renewed their predictions for above-normal temperatures through the end of January.
Mild weather patterns have been in place since late autumn, cutting into demand for gas used to heat homes and businesses. Half of all U.S. homes use the fuel.
Commodity Weather Group on Tuesday said over the next six to 10 days, large portions of the U.S. could see "major warming," with the potential for record high temperatures.
Matt Rogers, president of Commodity Weather Group, said this winter has been the third-warmest since 2000.
"The biggest problem with this year is that we've had three or four cold winters in a row, so there's always been at least a decent level of demand," he said. "It's a contrast that's pretty significant for the natural-gas market."
Record production from U.S. shale gas fields has combined with the warm weather to keep supplies near record levels. Last week, the Energy Information Administration said 3.777 trillion cubic feet of gas was in storage, 17% higher than the five-year average.
The sharp price declines in the past week have made traders wary of betting on a reversal, and several banks and investors are predicting a break below 10-year lows before prices find a bottom.
Jim Ritterbusch, head of oil-trading advisor Ritterbusch & Associates, said in a research note he would "strongly caution against any attempts to pick a bottom."
Natural gas for physical delivery at the benchmark Henry Hub last traded at $2.50 a million British thermal units, down from the previous session's average of $2.6717. Natural gas for delivery at the Transco Z6 hub in New York last traded at $3.6125 a million British thermal units, down from the previous session's average of $6.684.
