SINGAPORE — Natural gas prices slipped further Wednesday amid forecasts of mild weather in the United States, which means less consumption in the world's largest energy-consuming nation.
Natural gas dropped 7.2 cents to $10.95 per 1,000 cubic feet, a day after plunging 10 per cent to their lowest level in 3½ months. The sell-off triggered a decline in other energy futures.
Tuesday's settlement price of the January natural gas contract — $11.022 — was slightly above the level on the day Hurricane Katrina struck and knocked out significant Gulf of Mexico output.
Front-month natural gas futures reached an all-time intraday high of $15.78 in mid-December as cold weather and predictions of snow storms raised fears about supplies.
Light, sweet crude for February delivery slipped 31 cents to $57.85 a barrel on the New York Mercantile Exchange in electronic trading Wednesday.
Heating oil slipped marginally to $1.6348 a gallon, while gasoline declined slightly to $1.5126 a gallon.
With weather forecasters calling for higher than normal temperatures over the next week, the market sentiment has shifted. According to weather forecaster Accuweather.com, temperatures in most of the United States apart from the Northwest will be higher than normal in the next six to 10 days.
Crude futures have been reacting to fluctuations in Northern Hemisphere temperatures, especially in the U.S. Northeast, the world's biggest heating oil market.
The price of crude is 19 per cent below its all-time high of $70.85 on Aug. 30 after Hurricane Katrina made landfall.
Traders were awaiting the midweek release of a U.S. government supply report.
In news that could affect longer term prices, OPEC, which over the past year has tried to reduce market volatility by raising or lowering production, announced that it and Russia, the largest non-OPEC oil exporter, would meet annually on the ministerial level to co-ordinate policies.
The announcement followed a meeting in Moscow between OPEC's outgoing president, Sheik Ahmad Fahad Al Ahmed al-Sabah and Russia's minister of industry and energy, Viktor Khristenko.
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