Natural gas prices have been weakening on a stronger-than-expected El Nino weather pattern, along with surging energy production from the nascent U.S. shale oil industry. According to the U.S. National Oceanic and Atmospheric Administration, heating demand has been 23% lower-than-normal in the current heating season due to above average temperatures across the continental U.S., reports John Kemp for Reuters. [Natural Gas ETFs at New Lows as Inventories Hit New Highs]
NOAA also predicts the warmer temperatures to last through early 2016, pointing to an El Nino phenomenon that ranks among the top three strongest since 1950.
“While the warmer-than-average ocean waters are likely reaching their peak about now, they will remain a huge source of warmth for the next several months to drive the main impacts on temperature and rain/snow over North America, which typically follow the peak. The main impacts season is December-March,” according to NOAA. “Most models indicate that a strong El Nino will continue through the northern hemisphere winter 2015/16.”
United States Natural Gas Fund
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Max Chen contributed to this article.