Prospect for mild temperatures in the US leads to plunging US natural gas price

The prospect of a mild start to the winter coupled with plentiful stocks is putting further pressure on the US gas price, the front-month contract for US natural gas (Henry Hub) fell by an additional 10% yesterday to hit a 3½-year low of $2 per mmBtu. 

However, the price slide, which has been driven to a major extent by speculation, is exaggerated and due to a not entirely unusually high degree of volatility ahead of the heating season. 

"With a contract rollover due tomorrow, the price will at least appear to increase noticeably, for the December contract that will then serve as the benchmark is currently trading at $2.35 per mmBtu", says Commerzbank.