Weather conditions are driving down gas prices

Gas futures are falling sharply on lower fuel consumption and a weaker outlook, with warmer temperatures than expected across much of the world, especially in the United States. A warmer-than-expected start to a winter that could last for weeks has eased fears of a natural gas crisis that is expected to trigger blackouts and increase electricity bills. Forecasts call for warmer temperatures in much of Europe and the United States over the next few weeks. Much of China, the world’s largest gas importer, is also expected to see milder weather over the next 10 days, and Tokyo could see a rise in temperatures in mid-January. Gas futures are falling sharply on lower fuel consumption and a weaker outlook. U.S. benchmark prices fell as much as 12 percent on Tuesday, falling below $4 per million British thermal units for the first time since February. Despite a winter storm that moved coast-to-coast across the U.S. in December and prompted higher natural gas forecasts, the South and much of New England ended the month warmer than average, according to AccuWeather meteorologist Brett Anderson. “The risk of extreme market tightness that people worried about before winter started now appears low. While Europe is rebuilding inventories, milder weather in North Asia means there will be less competition for liquefied natural gas cargoes,” said Abhishek Rohatgi, a Singapore-based analyst at BloombergNEF.