Natural gas prices in the U.S. in the month of February 2020 have hit their lowest level since 2016, the country's Energy Information Administration (EIA) said in a statement on Friday.

On Monday, February 10, the near-month natural gas futures price at the New York Mercantile Exchange closed at $1.77 per million British thermal units (MMBtu), the EIA said.

"This price was the lowest February closing price for the near-month contract since at least 2001, in real terms, and the lowest near-month futures price in any month since March 8, 2016," the statement said.

In addition, the daily spot price at the Henry Hub national benchmark, which is used as a pricing point of natural gas in the U.S. to set the spot and future prices, was $1.81 per MMBtu on February 10, 2020 -- the lowest price in real terms since March 9, 2016, it added.

The two reasons behind prices hitting historic lows is the relatively warm winter weather this year that has reduced demand for natural gas for heating, and natural gas production growth outpacing demand growth, which reduced the need to withdraw natural gas from underground storage.

"Because supply growth has outpaced demand growth, less natural gas has been withdrawn from storage withdrawals this winter," the statement said, adding "... by January 17, 2020, working natural gas inventories reached relatively high levels for mid-winter."

The EIA said its data shows that natural gas inventories for the Lower 48 states, which excludes U.S. states of Hawaii and Alaska, reflects a 215 billion cubic feet (6.1 billion cubic meters) of surplus to the five-year average, as of February 7, 2020.

January 2020 was the fifth-warmest month of January in 126-year climate record, the U.S.' National Oceanic and Atmospheric Administration (NOAA) said on Feb. 6, adding that it was 5.4 degree Celsius above the 20th-century average.

By Ovunc Kutlu

Anadolu Agency

energy@aa.com.tr