Feb 24, 2023 - Economy

Natural gas futures prices have plunged 80% since August

Data: FactSet; Chart: Axios Visuals

A warm winter, strong production and rising inventories have clobbered U.S. natural gas prices.

Why it matters: The tumble in natural gas prices — which should translate into lower electricity and heating bills for many consumers — is another helpful force pushing inflation lower.

  • Searing natural gas prices have been key contributors to inflation: Over the last year, consumer gas prices were up nearly 27%.

The latest: Benchmark futures prices for U.S. natural gas — the so-called Henry Hub contract — are down roughly 40% since the start of the year.

  • The drop from the August peak is nearly 80%.

What they're saying: "Although latest weather forecasts show colder days on the horizon, particularly in the Pacific and Mountain regions, this is unlikely to cause a material uptick in demand. So, we should expect moderate demand at best," wrote analysts with Rystad Energy, a research firm.

The bottom line: Lower gas prices look likely to hang around, helping in the battle against inflation.

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