Natural Gas Drops to Lowest in 2 Years

Natural gas futures plunged 10% to a two-year low Thursday after U.S. government data showed record supplies.

Industry officials said homeowners who depend on natural gas for heat should see lower bills this winter, assuming normal temperatures.

“It looks much better than last year for natural gas consumers,” said Mark Stultz of the Natural Gas Supply Assn.

October natural gas futures fell 55.7 cents to settle at $4.892 per million British thermal units on the New York Mercantile Exchange. The last time front-month natural gas futures settled below $5 was Sept. 16, 2004.

Residential and industrial consumers of natural gas will no doubt appreciate natural gas prices that are more than 50% lower than a year ago, but some industry officials warned against breathing too easily. In the short term, however, natural gas futures are poised to fall as low as $4.50, said ABN Amro broker Gerry Saccente.

Natural gas supplies were already ample heading into the summer because a warm winter last year sapped home-heating demand and because most of the Gulf of Mexico output that was lost during last year’s hurricanes had been restored.