Natural gas prices may drop further on higher output in US

New York

RELENTLESS US production gains that caught many natural gas traders by surprise have triggered a 30 per cent plunge in prices since November.

Bank of America Corp says the selloff isn't over and is telling clients to brace for the possibility of sub-US$2 prices for the first time in three years. Gas output will climb to an all-time high of 78.39 billion cubic feet a day this year, an increase of 50 per cent over 2005, led by shale reservoirs in Pennsylvania, Louisiana and Texas, government data show.