Natural gas prices have hit a 10-year low thanks in part to a mild winter throughout much of North America — and that's good news for many consumers, observers say.

The price of natural gas — which consumers use largely to heat their homes — fell 6.8 per cent to US$2.49 on the New York Mercantile Exchange on Tuesday.

"As a general rule, when the commodity prices are lower, utility bills trend down over time," said Timothy Egan, president and chief executive officer of the Canadian Gas Association.

"It's not going to vary month to month. The utilities are revisiting this according to formulas that they've got in place with regulators."

Forecasters see above-average temperatures persisting for the next few weeks in many parts of North America, and U.S. supplies of natural gas remain well above their five-year average.

In the short-term, the lower demand affects natural gas prices, but there are long-term factors pushing down the price over time, too, said Egan.

One of those is the plentiful supply gushing out of shale rock formations throughout North America, thanks to advances in drilling technology.

"There's more supply in the market now than we've had in an extremely long time because of more and more gas finds, particularly unconventional gas. It's changed the supply picture dramatically in North America," he said.

Egan said he doesn't see any nasty surprises looming ahead for consumers.

"Supplies are very robust. Storage facilities are full in anticipation of the winter. So we're not anticipating any sudden spikes of any kind. We're expecting it to be a more-than-manageable winter from a consumer perspective," he said.

Bill Gwozd, vice-president of gas services at Ziff Energy Services in Calgary, agrees lower gas prices are "excellent" for consumers.

"However, some of them may have locked in to higher rates. They may have locked into rates last year and they thought maybe that was the low."

While temperatures in Western Canada have been plunging, Gwozd says the population is too small there to affect prices much. But a prolonged cold snap in big cities like New York or Chicago would move the needle.

For natural gas producers seeking a reprieve from the low prices, Gwozd said "you want to offer prayer services for cold weather in populated regions that are large gas consumers."

Aside from that, one of the only things natural gas companies like Encana Corp. (TSX:ECA) can control are their operating costs.

"That producer that becomes the lowest cost producer can survive in this environment. The high-cost producer's going to get wiped out," he said.

Long-term, Gwozd sees natural gas prices strengthening as volumes are exported from the West Coast in liquid form or converted in to transportation fuels — what he calls "unconventional demand."