Natural gas prices rise 4 percent; oil drops
NEW YORK (AP) — Natural gas prices jumped more than 4 percent Thursday after a government report eased concerns that U.S. supplies would overwhelm storage capacity this year.
The futures price added 9.5 cents to $2.348 per 1,000 cubic feet in New York.
Prices are rebounding from 10-year lows as supplies fall more in line with average levels for this time of year. The government's latest supply report says U.S. natural gas supplies rose by 28 billion cubic feet last week, below the 30-34 billion cubic feet that analysts had expected.
Analysts warned earlier this year that a glut in natural gas was in danger of expanding to a point where the U.S. would run out of places to put it. Natural gas producers such as Chesapeake Energy Corp., Encana Corp. and ConocoPhillips responded by shutting down some natural gas operations this year.
Those efforts are starting to make a difference, said independent analyst and trader Stephen Schork.
Supplies are still nearly 50 percent higher than average for this time of year, according to the Energy Information Administration. But they were more than 60 percent above average earlier this year.
Meanwhile, oil prices fell after the New York Mercantile Exchange made it more expensive for some traders to buy commodity contracts. Traders also said they were concerned about reports that U.S. service companies expanded more slowly last month. Costco, Macy's and Target also reported disappointing April sales.
Benchmark West Texas Intermediate crude dropped $2.58, or 2.4 percent, to $102.64 per barrel. Brent crude, which helps set the price for oil imported into the U.S., lost $1.87 to $116.33 per barrel in London.
At the pump, retail gasoline prices were flat at a national average of $3.803 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by 13.3 cents since peaking in April at $3.936. Gasoline is also 16.4 cents per gallon cheaper than the same time last year.
In other futures trading, heating oil gave up 4.84 cents to $3.0941 per gallon while wholesale gasoline lost 1.82 cents to $3.0575 per gallon.