US natural gas prices have plunged to a near-three-decade low as what is set to be the country’s warmest winter on record slashes demand for the heating fuel just as production surges to record levels, reported from the Financial Times.

The winter months, when heating demand is highest, are on track this year to be the mildest since reliable records began in 1950, analysts said, leaving gas usage much lower than expected. Coupled with surging US gas production, which hit a record 105 billion cubic feet a day in December, that has sent prices into freefall, plummeting by more than 50% since mid-January. On Friday, benchmark Henry Hub contracts for March settled at $1.61 per million British thermal units, up marginally from $1.58 per million BTU on Thursday. Apart from a handful of days in mid-2020, when the COVID-19 pandemic crushed demand, that is the lowest closing price for the month-ahead contract since 1995.

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