By Naureen S. Malik and Christine Buurma

Bloomberg News

Natural gas is trading like it’s 1999.

Gas prices are slumping amid record-breaking warm temperatures in the eastern U.S. Gas futures for January delivery fell 7.2 cents, or 3.8 percent, to $1.822 per million British thermal units on the New York Mercantile Exchange Tuesday, the lowest settlement since March 24, 1999. Futures are down 37 percent this year, heading for the biggest annual decline since 2006.

Unless a deep freeze blankets the northern half of the U.S., the country will remain awash in gas well into next year, keeping prices low. Banks including Credit Suisse and Barclays are cutting price estimates as output from the Marcellus and Utica shale basins outpaces demand for the heating fuel. Temperatures in New York reached 67 degrees on Sunday, beating a record for the date set in 1923.

“It’s getting a little too late for cold weather to rescue the gas market,” said Walter Zimmermann, chief technical analyst at brokerage United-ICAP in Jersey City, New Jersey. “There’s just so much supply in storage.”

Temperatures will be above normal across the eastern U.S. through Dec. 29, said MDA Weather Services. 

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