Record warmth sent U.S. natural gas prices tumbling to a 10-year low as December appeared to be a bust for bulls.
Gas slumped as much as 6.4%, the most since Nov. 20, as the latest forecasts showed temperatures more than 20 degrees Fahrenheit above normal in parts of the eastern United States later this month.
Cities from Lexington, Kentucky, to Binghamton, New York, over the weekend broke temperature records dating to the 19th century, AccuWeather Inc. data show.
New York City recorded a high Sunday of 67, a record for the date, beating a mark set in 1923, according to the National Weather Service.
Natural-gas prices are collapsing as mild weather dims the prospect of erasing a stockpile surplus that is the biggest for the time of year since 2012.
Supply from shale formations in the U.S. East has overwhelmed demand for the heating fuel, prompting analysts including Credit Suisse Group AG and Energy Aspects Ltd. to cut their 2016 price estimates.
“The forecasts are looking even warmer,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “There’s a lot of gas in storage, and production levels are still healthy. Without a turnaround in the weather, there’s not much to halt this kind of price slide.”
