U.S. natural gas futures tumbled the most in six weeks as forecasts showed warm weather through the end of October, stoking concern that a mild winter will limit heating demand for a second year.
Above-normal temperatures will prevail across most of the lower 48 states through Nov. 2, according to MDA Weather Services. The high in Chicago on Oct. 27 may be 64 degrees Fahrenheit (18 Celsius), 6 more than normal, AccuWeather Inc. data show.
The gas rally to a 22-month high may be running out of steam on speculation that consumption of the fuel will be muted over the next few months, allowing a stockpile glut to expand. Prices had surged earlier in October as record demand from power plants and a slowdown in gas production from shale formations helped trim a supply surplus.
“There are forecasts showing we could be above normal through October,” Phil Flynn, senior market analyst at Price Futures Group, said by phone. “Those forecasts are leading to concerns that supplies will be able to build.”
Gas futures for November delivery slipped 9.3 cents, or 2.9 percent, to settle at $3.17 per million British thermal units on the New York Mercantile Exchange, falling the most since Sept. 1.