U.S. natural gas futures plunged to 10-year lows on Thursday, as record production and mild weather extended seven straight sessions of losses that knocked nearly 20 percent off prices.
Front-month February natural gas futures on the New York Mercantile Exchange were at $2.419 per million British thermal units in early U.S. activity, down 5.3 cents, or about 2 percent, after sliding to $2.402, a contract low and the lowest price for a front month since March 2002.
The front month fell 19.3 percent in the past seven sessions, the biggest seven-day drop in 29 months.
As the boom in natural gas drilling sends U.S. output to new peaks, the absence of sustained cold across much of the United States has swelled inventory levels, with little supportive fundamentals in sight.
Cooler weather that hit consuming regions of the nation over the long holiday weekend and much of this week was expected to clear out by next week, making room for more above-normal readings for the remainder of January, typically the coldest period of the year.
The drop in prices has been marked by record or near-record trading volumes and open interest, a strong indication that players were putting in new shorts positions, and not just
bailing out of unprofitable long positions.