Oh baby it’s warm outside.

US natural gas prices have collapsed to the lowest level in almost 14 years, dropping 4.4 per cent on Monday to $1.901 per million British thermal units, as unseasonally warm weather on the US east coast cuts demand for the fuel, writes David Sheppard.

New York City is expected to see temperatures as high as 17 degrees centigrade on Monday, at a time of year when Santa suits and fleece-lined boots are more common attire than t-shirts. The average temperature in New York in December is normally about 3 degrees centigrade.

That’s helped push US natural gas to the lowest level since early 2002, as the fuel is already struggling under a supply glut and increased competition with oil. Brent crude oil hit the lowest level since 2008 on Monday, falling to $37.27 a barrel.

The weakness in US natural gas is particularly notable, however, given the time of year. Generally contracts for delivery in the northern hemisphere winter trade at a premium to those for summer months. Instead the contract for a July delivery currently holds a near 30 cent premium over the January contract.

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