April 10, 2012, 3:24 p.m. ET
--Futures sink 3.6% as heating demand wanes
--Contract on brink of hitting $2 psychological threshold
--March was warmest ever in U.S. - NOAA
By Dan Strumpf Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Natural gas futures tumbled more than 3% Tuesday to within striking distance of the $2 psychological threshold, as demand for the fuel used for heating continues to wane in the face of elevated production.
Natural gas for May delivery settled 7.6 cents, or 3.6%, lower at $2.031 a million British thermal units on the New York Mercantile Exchange.
That's the lowest settlement price for the front-month contract since Jan. 29, 2002.
Futures sold off through the day as the mild weather across the U.S. signaled the firm end of winter--and with it any chance of a major pickup in gas-fired heating demand.
Last month was the warmest March ever in the U.S., according to the National Oceanic and Atmospheric Administration, and current weather outlooks suggest temperatures aren't likely to fall significantly again this season.
"You know we're going to get to $1 out there, I can almost guarantee it," said Rich Ilczyszyn, chief market strategist at iiTrader. "The bearishness has been here for weeks."