He and other analysts expect the price to average near $3 for all of 2012. If the weather stays mild, the price could even dip below $2, a level not seen since 2002.
By JONATHAN FAHEY
Associated Press
NEW YORK — The price of natural gas is plummeting at a pace that has caught even the experts off guard.
A 35 percent collapse in the futures price over the past year has been a boon to homeowners who use natural gas for heat and appliances and to manufacturers who power their factories and make chemicals and materials with it.
The country is flush with natural gas as a result of new drilling techniques that have enabled energy companies to tap vast supplies that were out of reach not so long ago. The country’s natural gas surplus has been growing even as the country burns record amounts.
This winter’s warm weather slowed the growth in demand, however, and created a glut. In the Northeast, December was the fourth warmest in the last 117 years. Winter supplies are 17 percent above their five-year average.
The natural gas futures price fell 13 percent last week, to $2.67 per 1,000 cubic feet. That’s the lowest winter-time level in a decade.
“The market has been overwhelmed with gas,” says Anthony Yuen, a commodities analyst at Citibank.
He and other analysts expect the price to average near $3 for all of 2012. If the weather stays mild, the price could even dip below $2, a level not seen since 2002.