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In the News:
Natural Gas Futures Price Nears 10-Year LowNatural gas prices on the New York Mercantile Exchange (NYMEX) settled at $2.488 per million British Thermal Units (MMBtu) on Tuesday, January 17. A near-month contract has not ended daily trading that low since March 5, 2002, nearly 10 years ago. Prices dropped again, slightly, the following day, settling at $2.472 per MMBtu on Wednesday. Near-month contract prices fell below $3 per MMBtu during August and September 2009, but recent drops are particularly notable because of the time of year. January is typically a month when natural gas prices are relatively high, the result of increased weather-related demand. Most analysts attribute the current price weakness to a winter that, so far, has been much warmer than normal, combined with abundant production and storage surpluses.
The February NYMEX natural gas contract, during its recent tenure as the near-month contract, has been significantly below February near-month contracts for the last several years (see figure). In addition to the warmer-than-normal winter, temperatures in the coming week are expected to be relatively mild, possibly contributing to further price declines. |
