Warmer weather and large stockpiles have sent natural gas (NG=F) prices tumbling, down more than 27% over the last two months. Yahoo Finance's Ines Ferré breaks down the price action and what analysts are saying.

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Video Transcript

JULIE HYMAN: Let's switch gears and look at what's going on in commodities today. In particular, natural gas seeing a big move and a bearish trend. Milder temperatures are keeping demand low and prices under pressure. Our Ines Ferre is here with more in the action. Hi, Ines.

INES FERRE: Hi, Julie. Yeah, and we have seen this trend when it comes to natural gas. I'm going to pull up our YFi interactive board so you can see how much we're down with natural gas over the last couple of months. I'm going to pull it up right here.

Over the last two months, it's down 27%, more than 27%. Now why is this happening? As you just mentioned, we are seeing some milder weather here in the US. It's already December. There is also a tremendous amount of storage of natural gas. In fact, the latest EIA data is showing that in late November, stockpiles were up 9.8% over November of 2022, also up 8.6% over the last five-year average. So we are seeing some record production also of natural gas that's at play. That's also pressuring the markets as well.

We saw, you'll remember last year, Europe's natural gas prices went to record highs. Here in the US, you had natural gas soaring above $10 per million British thermal units. Those are the units that is quantified in. We just started the peak demand season now for natural gas. January would be the ultimate peak in demand. So if this warmer weather persists, there are some analysts that are saying that you could see this number of natural gas at 2 point-- below $2.

Now, analysts are saying that they're anticipating that there is more demand that will meet the supply. On the bright side, what they're saying is that, look, this is oversold territory right now. So you should see a correction to the upside.

One other note is that in Europe, if we do see prices spike in Europe, this will also have an impact here in the US, because the US exports liquid natural gas. So by the way, if these trends though stay the same going down, you could see your energy bill much lower this winter, especially if you heat your home with gas. Guys.

JOSH LIPTON: Ines Ferre, thank you so much.