The NYMEX January natural gas futures contract continued to fall Monday morning and as of 10:34 a.m. EST (1534 GMT) was trading at $3.245/MMBtu, down 7.2 cents from Friday's settlement of $3.317/MMBtu.
Phil Flynn, an analyst with PFGBest, said that despite frigid cold in the Northeast, much of the country is seeing milder-than-normal weather, particularly the Midwest, where temperatures are well above normal.
"Once again the market's getting impacted by weather," Flynn said. "The warm temperatures are just sinking this market. Even the cuts in production can't keep up with the lack of demand."
On Friday, Baker Hughes reported that the number of gas-directed rigs dropped to 856, its lowest level since January 2010.
"Prices have challenged lower levels much sooner than expected, but they have also reached levels that have been much more oversold than they otherwise would have been at existing numbers on the price charts," said the energy research firm Cameron Hanover. "We fully expect prices to keep working lower until they encounter support and oversold pressures that are strong enough to give prices a real psychological boost."
The contract was trading between $3.217/MMBtu and $3.262/MMBtu.
