(Bloomberg) -- U.S. natural gas futures saw the biggest weekly drop since February as forecasts for unseasonably warm weather spurred concern that a mild winter will erode demand for the heating fuel.
Prices are reversing course after reaching a 22-month high earlier this month on the back of record power demand and a slowdown in production. Friday’s slump dragged down the stocks of explorers including Southwestern Energy Co., which slid as much as 7.9 percent, and Range Resources Corp., which lost 3 percent.
The weather will be warmer than normal across most of the continental U.S. Oct. 26 through Nov. 4, according to MDA Weather Services. The high in Chicago on Oct. 28 will be 63 degrees Fahrenheit (17 Celsius), 5 above average, AccuWeather data show.
“The realization that we will have a later start to winter has started to turn the market,” Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut, said by phone. “November is supposed to be above normal and some forecasts are showing December will come in mild.”
Gas futures for November delivery slipped 14.8 cents, or 4.7 percent, to settle at $2.993 per million British thermal units on the New York Mercantile Exchange. That was the first settlement below $3 since Oct. 4. Futures dropped 8.9 percent this week, the biggest decline since Feb. 5.