(Bloomberg) -- US natural gas futures slumped the most since June 30 as rising production and a milder weather outlook led traders to shed some of their bullish bets.
Gas for October delivery fell as much as 11% on the New York Mercantile Exchange, touching the lowest price since Aug. 10. The front-month contract settled 7.3% lower at $8.145 per million British thermal units.
The selloff is an indicator that some of the woes that pushed prices last month to the highest level in 14 years have run their course. Milder weather is expected to cap demand across much of the US through the next couple of weeks, while production has jumped to record levels. That should help suppliers fill up inventories, which are still 11% below normal, ahead of winter.
Traders cashing out recent gains to cover margin calls in Europe may have exacerbated losses, according to Gary Cunningham, director of market research at risk management firm Tradition Energy. The European gas benchmark has nearly tripled this year amid a supply crunch as Russia cut exports to the bloc.
“We’ve seen a lot of money get pulled out of the US markets,” Cunningham said in an interview.
Read: US Natural Gas Output Climbs to Record Amid Price Surge: Chart
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